HJ 


LMIJUIIIIII 


2 . 3*5(0 

^OfNlZ, 


• fill*i#i14«••in• ill*• a t • 

I t.i ii i • fill 1) |I l 

• * • • i i • • 1 lit in 11 i) 

• • • 

» • ' > I i »’t » 

•m 0 i m ii i «i i» 1 mmn 

•Miiii’M • i i * i I » i I i I ill i f, 

» i • »l i * 11 i i i’t’i i i) 1 > J i ill i 
I ill )Ui i I )] i i i ) i l l iiiiji 

• ■ »II » i f I i ill i. i I i I i ill it 

"»*•’v-»»>••>* v • 

.. .. 

' ■ • . • , • • . • • b»• . t 

' 


I ii i } i J «i1 i » I JI i »i i i t iti • i f i l'i i 

M * • • • i i I » > i i i l.i (• 11 j i i f I) I i i i i i i t i a »i i a • i i’j i i i i) ii j> 

Ii i#iII iiiiiiiy111ii)|till Ji l • illiiiji^i 
i 4 •}} |»|ii Ml I fc > l fc III Ii III ill ft ii* ii > ii lit it • i I u tt» i It 

fitiiiittitiiitiiii 

4 1 »»* * , ;i11titt i i I * 


FT MEADE 

GenCol1 


iiiiiitiliiiiiiiili 

•titiiiitiiiUiiiiia 
t *i a it i I•• i 1 i aa * i t • 

Y«k,, a*. t. .Via, 



On Real Estate 


WESTCHESTER COUNTY 
CHAMBER OF COMMERCE 

















































































































































































































































































































































































































Gass H:\g-33l. 
ton ic .V-! b 
Giiyifelil'N 0 V-. . 

COPYRIGHT DEPOSIT. 










TAX EXEMPTIONS 
ON REAL ESTATE ' 


•'Jin Increasing rJXCenace 


A STUDY 


THE WESTCHESTER COUNTY 
CHAMBER OF COMMERCE 


The Westchester County Chamber of Commerce 
White Plains, N. Y. 


1922 


Tv 


% 


VAXs^>£o 

\ f ^/ £e? 

c - e T^' 2 - 


Copyright 1922 
by 

The Westchester County Chamber of Commerce 
White Plains, New York 


FEBii 72 


/ 


CLA661451 


7 / 



Introduction 


The purpose of this volume is not to extol the beauties 
of Westchester nor to secure special sympathy or consid¬ 
eration for its inhabitants. Westchester’s tax problem is 
symptomatic of the tax problem of all counties of the State, 
and for that matter, all counties throughout the country. 
Like Main Street, the tax problem runs from one end of 
the country to the other. But Westchester feels it more 
keenly because in these local areas the pain seems more in¬ 
tense to the suffering. Lumbago and sciatica others may 
have, but ours is the worst. But in the study of the symp¬ 
toms, the cure we find we hope will turn out to be the cure 
for others. Application of local massage we know will not 
cure—we have tried it. The trouble is organic, not super¬ 
ficial. 

Westchester adjoins the big metropolis. Two or three 
decades ago it acquired a reputation for having the finest 
country estates in the country. It still has them. But with 
increased congestion in the city and improvement of transit 
(especially the electrification of the road from 42 nd Street 
through the tunnel) men found in Westchester the oppor¬ 
tunity to satisfy the fine ambition of every good husband 
and father—to get a little bit of green and own one’s own 
home. The wife and the children had, it is true, something 
to do with it. But the high rents of New York City had 
more. So Westchester grew quickly in population and her 
hills and valleys became dotted with small homes. Cities 
like Yonkers, White Plains, Mount Vernon and New 
Rochelle rapidly grew up to supply the needs of these home- 
seekers. Country clubs, great hotels—golf, tennis, swim¬ 
ming, boating—all the things which make for a better and 
healthier physical life made Westchester’s natural attrac¬ 
tiveness and contiguity to the city all the more popular for 
home seekers. 


I 


Historical Origin of Tax Exemption 


But the high cost of living does not stop with the living. 
There must be burials and burial plots. Westchester has 
the finest and costliest cemeteries in the world. The sick 
and the delinquent, too, must be cared for. New York 
is too expensive to house them. So as fast as business 
moved north on Manhattan Island, her penal, her philan¬ 
thropic, her educational institutions and her cemeteries 
were crowded north and out into Westchester and more 
great acreages became devoted to these worthy purposes. 
Westchester, rich in natural landscape, made no protest, 
opened up her generous arms and received these institu¬ 
tions regardless of creed or color or previous condition of 
servitude. Thus in Westchester there thrive today great 
estates of charity, of education, of religion, and of health— 
rich in the work they are doing for society generally—pros¬ 
perous most of them in their own finances, generously sup¬ 
ported by contributions from all over the world, rendering 
a service not alone to Westchester but to society as a whole. 

Gradually, however, these large estates began, like 
sponges, to wash up the slate of the assessor’s rolls. “Tax 
exempt” most of them are. Until it came to pass, in one 
instance, that, if the county had not given it a subsidy, a 
whole township would have failed for lack of means to 
educate its children. Exemption washed its tax rolls almost 
clean. Gradually, large and small taxpayers complained. 
In Westchester, if you own real estate, you pay taxes to the 
State, to the county, to the town, to the village, and then 
besides you pay a school tax. When the income tax law was 
passed in New York, it was provided that the counties 
should receive from the State fifty per centum of the total 
income tax apportioned among them according to the pro¬ 
portion which their assessable real estate bore to the total 
of the State . 1 II Obviously, when it became apparent that 
each county could get a larger share by boosting up its tax 
rolls, full ioo per cent, valuation became the rule. There 

1 New York State Personal Income Tax Taw. §382. 

II 




of Charitable Institutions 


was no sense in boosting exempt valuation—nothing was 
gained because the exempt valuation added nothing to the 
proportionate amount to which a county was entitled. It 
was the “taxable” property only that counted. Why should 
an assessor determine the real value of exempt property 
when nothing was to be gained thereby ? 1 * Ill 

So it came to pass that your tax bill grew each year. The 
little home you built began to resemble that apartment you 
had had in the city. True, you were your own landlord, but 
when you added to your income tax your county tax, your 
village tax, your town tax, your school tax, your house be¬ 
came a venture reminiscent in cost of the rent you paid the 
city landlord. 

The Westchester County Chamber of Commerce is a 
body of residents of Westchester County pledged to im¬ 
prove conditions of living in general in the county. It 
could not long remain inactive in this tax matter. From 
all parts of the county came poignant cries for relief. The 
Chamber’s Committee on Taxation said, we will first of all 
get the facts. It got them. They appear in Part II. They 
were startling. The growth of exemptions in proportion to 
assessed values, the gross injustices and inequalities made 
it important to do something. But as Mark Twain said 
about the weather, “Everybody talks about it and nobody 
does anything about it.” 

What was to be done? The habitual method for cases 
like this is, in New York as elsewhere, to appeal to the 
Legislature. Draw a bill and get it passed. But the tax 
committee of the Chamber were a mulish lot. They would 
not draw a bill, though we stressed and urged the necessity 
for immediate relief. They startled us one day by an¬ 
nouncing that before they would draft anything in the na- 


1 See opinion of Attorney General, New York, Income Tax Letter No. 

36, dated June 10, 1920, upon which State Comptroller advised county 
treasurers that exempt property was not to be included in total of 
assessed valuations. 


Ill 




Historical Origin of Tax Exemption 


ture of legislation, they wanted to know how the whole sys¬ 
tem of tax exemptions came about. If “there’s a reason,” 
let’s know what it is. And they finally persuaded us that 
the method was intelligent and one to be followed. Free 
rein was given to the committee; a reasonable amount of 
money was raised. 

The committee found, to its astonishment, that there 
was comparatively little or no literature on the subject. 
Like Topsy, tax exemptions just “grew up.” How they 
grew, what was their origin, their parentage—no one 
seemed to know. The professors of economy who were 
approached told the committee such a study as the com¬ 
mittee required did not exist, was yet to be made—that it 
would, when made, form a valuable contribution to the 
science of taxation. 

The committee, itself a body of busy men, sought help. 
With the aid of kindly and sympathetic professors at Co¬ 
lumbia University, it found a young man trained in the law, 
in history and in economics, with a scientific as well as 
literary turn of mind, who was willing to undertake the 
task of historical research. And it gave him full rein. 
It left him like a student in a chemical laboratory with no 
duty save to find the bug. He was not even to find a serum. 
In short, he was merely to isolate the important historical 
facts and let us develop the remedy. 

And so Philip Adler undertook his study and wrote 
“The Historical Origin of Exemption from Taxation of 
Charitable Institutions,” which now forms Part I of this 
volume. The work was well done. It gave us the historical 
background we needed. It enabled us to get a solid footing 
in this branch of social and political science. All growth 
proceeds from some prior growth. The great value of 
Wells’s “Outline of History” consists in its lesson that 
nothing exists save as the successor to something or the 
precursor of something else. 

Human institutions do not come about as accidents. They 
IV 



of Charitable Institutions 


develop to meet social needs. The needs create them. And 
if man is wise and fore-sighted he will mould his institutions 
always in the light of the experience of the past. History 
gives us the broad perspective which makes for sound 
judgment. This study of the historical origin of tax exemp* 
tions is, we believe, the first ever attempted. We know of 
no flaws in it. 

Still our tax committee refused to draw up legislation. 
They said, let us publish this study, let us print the facts, 
let us put out as Part I the study and as Part II the facts 
as we know them in Westchester. Then let the rest of the 
State begin to think with us. Let them criticise the study, 
the facts; let them propose remedies. In the meantime, we 
will have time to digest and to think over what is placed 
before us. 

The committee’s tentative deductions will be found be¬ 
tween Part I and Part II. 

Is the committee right in these deductions? Are there 
other deductions that should be made? What is the 
remedy, if the deductions are sound? 

This book is ultimately to be a volume of three parts. 
Part III is yet unwritten. It will be entitled “The Remedy.” 
It will be written by our Committee on Taxation after this 
present edition of the book has been read and studied by 
tax experts, taxpayers, tax collectors and publicists. Criti¬ 
cisms, suggestions for remedy all will be welcomed. This 
first edition of the book will be followed by a second— 
when we are ready—which will contain all these parts. 

So Westchester presents this little volume as its partial 
contribution to the great problem of real estate taxation, 
conscious that taxation of real estate is immediately and 
directly related to the social life of a people—that the 
search for an equitable system of distribution of the social 
burden which each should carry according to his strength, 
is part of the greater search for a sound social organization. 

We still have the lumbago and sciatica. It hurts. My, 


V 



Historical Origin of Tax Exemption of Charitable Institutions 


how it hurts. But until we are sure of the source of the 
trouble, like the old lady with the rheumatism, “We ain’t 
agoing to let any old doctor cut our leg off or pump drugs 
into our system.” We are quite conservative in West¬ 
chester. 

Westchester County Chamber of Commerce, 

By Collin Armstrong, President. 

January, 1922. 


VI 



PART I 


HISTORICAL ORIGIN 
OF THE 

EXEMPTION FROM TAXATION 
OF 

CHARITABLE INSTITUTIONS 


BY 

PHILIP ADLER 






✓ 








PREFACE 


At the outset it is necessary to define the strict limits 
within which it will be endeavored to conduct this inquiry. 
The subject matter, in its nature, easily lends itself to 
indefinite expansion, and the danger is ever present of 
making excursions and forays into attractive side-fields. 
Partisan and controversial argument will be strictly 
eschewed. The burden of this essay will be to discover 
the historical origin of the exemption from taxation of 
charitable and benevolent institutions, and to trace the de¬ 
velopment of such exemption in the United States to the 
present time. 

It will be observed that, even so rigidly confined, this 
inquiry is one of wide compass. It involves not only a 
history of exemptions of charitable institutions, but also a 
history of taxation and a study of the development of 
charitable institutions; all three are inextricably interwoven. 

The phenomenon of taxation, as we moderns know it, 
is of comparatively recent origin. 1 * Ill With the various 
changes in economic conditions that have taken place, the 
system of taxation has undergone corresponding transforma¬ 
tions. With the shift in the theory of taxation there comes 
necessarily a change in the subjects on which taxation falls 
Such changes in theory will patently enlarge or narrow the 
field of exemptions. Moreover, the social esteem in which 
charitable institutions are held at a given time, the power 
and influence they exert, the ends they are deemed to sub¬ 
serve, will throw them either within or without the cate¬ 
gory of exempted properties, as the case may be. 

Needless to say, the inquiry into the history of taxation 
and of charities, being in a sense collateral, will not be 
directed with a view of comprehensively stating the facts 
involved. What will be attempted is the presentation of a 
bare outline of such a history. Matters of detail will be 

1 Dowell: History of Taxation and Taxes (1st Ed.), 1, Preface. 

Seligman : Essays on Taxation. 1-6. 


Ill 



Historical Origin of Tax Exemption 


marshalled only insofar as they are tactically relevant to our 
major thesis—the history of the exemption of charities 
from taxation. 

Where should an inquiry of this nature begin? The dif¬ 
ficulty of finding the point of origin of a social growth is 
proverbial. There is an uninterrupted continuity of history, 
an endless chain of cause and effect, which makes any 
classification of history, such as that of Ancient, Medieval 
and Modern, ludicrously artificial. The most familiar 
present-day institutions and practices have their roots in the 
hoary past; they may be said to be the crest of a wave that 
reaches far back into history; it is as difficult to determine 
just when a social growth begins to develop as it is to deter¬ 
mine just when a wave begins to form. But we must start 
somewhere. 

Plainly the colonial period cannot be a starting-point 
because the colonists brought with them from England the 
political, social and moral ideas which there governed the 
exemption from taxation of charitable institutions. Further¬ 
more, the English practices, and the conditions which 
brought them about, have themselves a long history which 
it is necessary to trace for a proper understanding of these 
practices. 

Perhaps the least arbitrary and, on the whole, the most 
satisfactory point of departure is the period when the 
Christian Church was established. The reasons for this 
choice will appear, it is hoped, from the body of the text. 
However, it may not be amiss to state one reason for it 
here, namely that the Christian Church was the first to 
establish an organized system of charity. Exemption prac¬ 
tices among the Greeks and the Romans will be outlined 
to lend completeness to this study. The Roman system of 
taxation, like the Roman system of law, was not a causative 
factor in shaping English institutions. 

The term charitable institutions in the title is used to 


IV 



of Charitable Institutions 


embrace benevolent, fraternal, religious, eleemosynary, edu¬ 
cational and similar institutions. 

Though this essay is designed primarily to reach the lay 
eye, portions of the text are unavoidably technical. This 
is so not merely because of the technical nature of the 
subject. There is also the reason that some of the facts 
gathered here are the fruit of first hand search and, con¬ 
sequently, authoritative citation became a necessity. Much 
of the data collected, particularly that portion dealing with 
the taxation of church property in Medieval times, has not 
yet been made sufficiently known even to special students, 
let alone laymen, to warrant a mere general array of con¬ 
clusions. For that matter the writer has been unable to 
find any work which summarized or even stated the relevant 
facts. As best he could he had to get the facts for himself 
—and, in the light of the actual findings, the writer cannot 
resist the feeling that he has rushed in where others have 
feared to tread. Obviously this essay could not be cast in 
the mould of the conventional report. If the layman finds 
the references to the Rolls of Parliament, English Statutes 
and more or less recondite books somewhat tiring, it is 
hoped that, in the light of the premises, he will accept them 
as a necessary evil and run his eye over them without undue 
irritation. P. A. 


V 




I. 


The Need of In 1916 the New York State Library pub- 
inquiry as to lished a pamphlet 1 in which the Legisla- 
Tax Exemption tive Reference Librarian had compiled the 
constitutional and statutory provisions relative to tax exemp¬ 
tions in all the states of the Union. Appended tables com¬ 
pared the total amount of taxable property with the amount 
of property exempt from taxation. These statutes, consti¬ 
tutional provisions and tables plainly show that the bulk of 
the properties exempt are those of benevolent, fraternal, 
religious and other charitable institutions. On that head the 
states are fairly uniform in their exemption provisions. “In 
this general agreement among all the states there lies the 
danger that the principle may be abused.” 2 With tax bur¬ 
dens rising higher and higher it is inevitable that a claim for 
exemption be considered with a good deal of circumspection, 
particularly when the major portion of the exempt property 
belongs to one category. An inquiry into the raison d’etre 
and origin of the exemptions so uniformly meted out to such 
institutions is therefore pertinent and pressing. 

Judicial Dicta In deciding the question, which has often 
as to Origin of arisen, whether a certain institution falls 
Exemptions within the limits set by the exemption clause 
of a statute or a state constitution, a number of courts have 
essayed in instructive obiter dicta an explanation for these 
uniform exemptions. Typical of the general run of such 
explanations is the one offered by the New York court in 
People v. Barker. 3 

“The policy of the law has been in this state from an 
early day to encourage, foster and protect corporate institu¬ 
tions of a religious and literary character, because the reli- 

1 William E. Hannan: Property Exempt front Taxation in Forty-eight 
States, Legislative Bulletin 42, New York State Library. 

3 Ibid., 8. 

3 42 Hun 27. 


1 



Historical Origin of Tax Exemption 


gious, moral and intellectual culture afforded by them were 
deemed, as they are in fact, beneficial to the public, necessary 
to the advancement of civilization, and the protection and 
welfare of society. And therefore these institutions have 
been relieved from the burden of taxation by statutory ex¬ 
emption.’’ 

The language of the Georgia court, directed to the same 
point, is more picturesque and illuminating: 

“The duties enjoined by religious bodies and the enforce¬ 
ment by them of the obligations arising therefrom . . . 

such as benevolence, charity, generosity, love of our fellow- 
man, deference to rank, to age and sex, tenderness to the 
young, active sympathy for those in trouble and distress, 
beneficence to the destitute and the poor, and all those 
comely virtues and amiable qualities which clothe life ‘in 
decent drapery’ and impart a charm to existence, constitute 
not only the ‘cheap defense of nations,’ but furnish a sure 
basis on which the fabric of civil society can rest and without 
which it could not endure. Take from it these supports, and 
it would tumble into chaos and ruin. Anarchy would follow 
order and regularity, and liberty, freed from its restraining 
influence, would soon degenerate into the wildest license, 
which would convert the beautiful earth into a howling 
pandemonium fit only for the habitation of savage beasts 
and more savage men. The restraints thus imposed . . . 

which, from the very nature of things, it is beyond the power 
of the state either to call into operation or to constrain 
obedience to ... at least . . . become . 

indispensable instrumentalities in the administration of the 
government, and so they have ever been regarded by our 
legislators.” 1 

Manifestly these quotations do not probe the question of 
the historical origin of the exemption from taxation of 
charitable institutions; they merely attempt to justify an 

1 Trustees of the First Methodist Episcopal Church v. City of Alabama, 
76 Ga. 181, 193. 


2 




of Charitable Institutions 


existing fact. The problem still remains: When, how and 
why did the practice, now so uniform and general, of 
exempting charitable institutions begin? No authoritative 
work on this subject has yet appeared; where the problem 
is considered, it is merely touched obliquely and incidentally, 
and, for the most part, inquiry into the origin of the phe¬ 
nomenon is throttled at the threshold by the uncritical 
assumption that such exemptions have always existed. The 
answer to the root inquiry is, therefore, still shrouded in 
the mists of the unexplored past. 1 

Organized Among primitive people of nomadic 
Charity habits, where life means a state of intermit- 

Presupposes a tent warfare, the charitable impulse can find 
Stable Society p t tle expression. It is only after a com¬ 
munity has entered upon the agricultural stage of develop¬ 
ment, when the arts and crafts are developed, when a cen¬ 
tral government has been established, that organized relief 
of the needy appears. Of course, the individual philanthro¬ 
pist has always existed—at least from the time when human 
kindness and pity first appeared on the earth; perhaps he 
will always be with us—at least until the milk of human 
kindness is dried up or turns sour. But until a stable society 
is created, no organized scheme of charity can exist. And 
it is only the collective effort of a unified group in aid of its 
needy members that concerns us here. 


It is to be borne in mind that relief of the 
Organized poor and infirm was in pre-Christian times 

Charity—Greek essentially a governmental function. In- 

Period° man deed, because °f tbe ab J ect poverty of the 
lower classes in early society, the govern¬ 
ing powers found it necessary as a matter of state preserva- 


1 In their praise of Professor Tout’s very recent book, Chapters in the 
Administrative History of England, the critics generally deplore the fail¬ 
ure of scholars to study the administrative branches of the English gov¬ 
ernment, particularly the Exchequer, as fully as they have the political 
branches. See American Historical Review, Oct., 1920, page 78. 




Historical Origin of Tax Exemption 


tion to maintain the destitute and prevent them from sink¬ 
ing into slavery. Thus in Sparta and in Crete the needy 
citizens were wholly supported out of public funds. The 
Athenian methods of relief were more complex. Solon, in 
an endeavor to free many Greeks who had mortgaged 
their bodies for loans, annulled the debts of the laboring 
classes. Public corn was distributed gratis or sold at greatly 
reduced rates from public granaries, to which rich citizens 
often made large contributions. The infirm, as well as the 
orphans of soldiers, were paid a stipend by the State. There 
are instances where private property was confiscated and 
the proceeds distributed among the destitute. Under cover 
of paying citizens for a public service, such as attending 
the Assembly or Ecclesia, which was the privilege of rich 
and poor alike, the State doled out alms to its poor. 

Supplementing this State activity, there is evidence of 
private liberality of rich citizens, who would occasionally 
fit out a few ships for the State, ransom a captured citizen, 
or pay the funeral expenses of others. Furthermore, about 
the various temples there gradually arose abodes for the 
old, the infirm and strangers. The first organized medical 
relief began in the temples, where were founded the early 
schools of medicine. Itinerent physicians "would often visit 
the poor at public expense. 1 

The same forces that drove the Greek working classes 
to poverty and slavery operated even more effectively in 
Rome, and in an effort to preserve its citizenry the Roman 
State undertook to sustain its poor. There are numerous 
instances where the emperors distributed largesses of corn, 
oil, wine, pork, and even of money. The famous Gracchi 
brothers introduced into Rome the fatal practice of the 
annona civica, that is, the periodic gratuitous supply of corn 
by the State to Roman citizens. Another form of charity 
was the sportula, which was the food given by the patron 
to his clients; this was so extensive a practice that the State 

^och: Charity and Social Life, 20-56. 


4 




of Charitable Institutions 


was moved to regulate it. 1 A list of poor children was kept 
who were fed by imperial bounty. This was known as the 
alimentarii pueri 2 

Among the Greeks and Romans relief of the poor, as 
we have seen, was a public function; State action was 
motivated by the desire to placate the turbulent lower classes 
and to prevent the citizenry from degenerating into a condi¬ 
tion of servitude. 3 But relief measures were primarily 
directed towards maintaining the poor. The aged, the sick, 
the infirm, the diseased received no organized care. The 
absence of such relief is perhaps not surprising when we 
consider that among the Greeks and Romans the practice 
of infanticide still persisted and, particularly among the 
Spartans, the practice of killing off the aged and infirm. 4 

But with the foundation of the Christian Church and its 
establishment in the western world the administration of 
charity was taken out of secular hands and vested in the 
Church. 5 Coeval with this development, and also as a 
result of it, a great number of charitable institutions were 
founded throughout the Christian world. This phase of 
the subject merits detailed attention. 


Charity Be¬ 
comes the 
Special Func¬ 
tion of the 
Church 


The Jewish religion was the first to em¬ 
phasize the duty of charity. Literally ap¬ 
plying the Jewish precept, “Thou shalt love 
thy neighbor,” 6 all Jews were enjoined to 
give alms, under penalty of punishment with 
stripes or distraint. Any one who gave less than a tenth 
of his means was “a man of evil eye.” There were alms 
for the poor before prayers, gifts for the poor at marriages 
and funerals; other gifts “out of the seed of the earth,” 
gleanings left in the process of reaping, corn overlooked 


1 Humbert: Essai sur les Finances chez les Romains, 1, 326. 

2 Loch: op. cit., 104-110. 

8 Warner: American Charities, 4. 

4 Sumner: Folkways, 109, 308-329. 

6 Warner : op. cit., 7. 

6 Leviticus, Chap. 19, verse 17, 18. # 


5 




Historical Origin of Tax Exemption 


and left behind, were periodically given to the poor, orphans 
and widows. About the synagogue houses of relief for 
the aged, the crippled, the sick and poor, gradually grew 
up. These extensive measures for relief were undertaken 
because of the prevalent belief that “the poor would not 
cease out of the land.” 

This latter doctrine, and the doctrine of the virtue of 
almsgiving, was enlarged upon by the Christian Church 
and put into wide practical application. Later this theory 
of charity underwent an important transformation. The 
belief was held that almsgiving would procure absolution 
from sin and would alleviate the suffering of the soul in 
purgatory. 1 Inspired by such a motive for charity, it was 
but natural for the Christian church to establish an extensive 
organization of charities that soon controlled the entire field 
of charitable work. 2 

Furthermore, owing to the disorganized condition of 
the secular government after the dissolution of the Roman 
Empire, the Church, as the wealthiest and most powerful 
institution of its time, was the only organization in a posi¬ 
tion to take over the work of charity. Even under the 
Roman emperors the Church, because of large bequests 
left by rich men, owned extensive estates. The rule of the 
Roman law that property could only be willed to an author¬ 
ized person or juristic entity, like a municipal corporation, 
was changed to allow donations of every kind to the 
Church. 3 Gifts to “Christ our Lord” or just to the poor 
became legal. “Charitable property was thus Church 
property.” 4 In the fifth century, says Chadwick, the 
Church was the largest landowner. Throughout the Mid¬ 
dle Ages there was a veritable frenzy of gifts and endow¬ 
ments for the Church for various charitable purposes. Hun- 

1 Warner: op. cit., 7. “This doctrine of Augustine that alms have power 
to extinguish and expiate sin, taught only with qualification, became the 
motive power of the charities of the Middle Ages.” 

2 Chadwick: The Church, The State and the Poor, 12-23. 

3 Serrigny : Droit Public Romain, 372. 

4 Loch: op. cit., 227 .—Corpus Juris Civilis, ed. Krueger, 1877, II, 25. 

6 




of Charitable Institutions 


dreds of institutions were scattered throughout Europe. 
Intensely religious, the medieval mind found an expression 
of consummate good in enhancing the work of the Holy 
Church. The Kings were the largest benefactors. 

Grants of Land Says Gneist, speaking of Anglo-Saxon Eng- 
to the Church land: “The property of the Church at¬ 
tained an extent which at the close of the Anglo-Saxon 
period towers far above the importance of the royal 
revenues. . . . Following the example of Aethelbert, 

who bestowed his palace with its lands upon St. Augus¬ 
tine, the Anglo-Saxon kings and magnates also made rich 
gifts. ... A person entering a monastery not in¬ 
frequently brought his whole fortune with him; recovery 
from severe illness and escape from disasters, as well as 
joyous events, were commemorated by donations. . . . 

Thus arose the landed property of the Church, almost 
constantly growing and increasing until, in the case of many 
cathedrals and monasteries, it was equal to that of the 
temporal great thanes .” 1 

But the magnitude of the donations to the Church can 
only be appreciated by a summary of the benefactions of 
the Norman kings. In point of generosity they even out¬ 
did their Saxon predecessors. They not only founded 
numerous charitable houses themselves, but fostered the 
introduction of monastic and religious orders by their sub¬ 
jects . 2 Bishop Tanner, in his monumental Notitia Monas- 
tica, enumerates the various institutions founded by the 
Norman kings. Thus under William the Conqueror there 
were founded “four houses of Black canons, two or three 
hospitals, thirteen benedictine abbeys and priories . . . 

and about fourteen alien priories; whereof the King him- 

1 Gneist: Constitutional History of England I, 72. 

2 Rot. Pari., IV, 19b, 80b.—Rot. Pari., II, 337a: “Puis por grade devo¬ 

tion por divorsez faitz et proces de temps donerent as ditz Eglises riches 
Rentes, Terres et grades Possessions—. . . si amontant a pluis q la 

Tierce partie de son Roialme.”—Rot. Pari., II, 332a, where almsgiving 
is declared to be one of the causes of the foundation of “Hospitalities 
almoignes et autres oevrs de charite.” 

7 




Historical Origin of Tax Exemption 


self built and endowed the great abbeys of Battel and Selby, 
the priory of Hinchinbrook, and four or five alien priories.” 1 
In the reign of William Rufus there were founded thirteen 
benedictine houses, two colleges, two hospitals 
“whereof certain priories and hospitals were built and 
endowed by the King.” 2 Henry I, surnamed “Beauclerc” 
for his learning, was a pious King who founded no less than 
ten monasteries himself. During his reign there were 
founded about one hundred and fifty religious houses. Sev¬ 
eral new orders, like the Knights Hospitalers and the 
Cistercians, were introduced into England. During the years 
of Stephen’s reign, troublous though they were, many new 
orders like the Knights Hospitallers, the Premonstraten- 
sians, the Gilbertians, were established. Within a space of 
eighteen years more than a hundred religious houses were 
established, many of which owed their foundation and en¬ 
dowment to King Stephen. 

In varying degree this feverish endowment of religious 
houses went on apace during Henry II’s reign, even during 
the reigns of Richard I and John, when the resources of 
the country were drained by the crusades and civil strife. 
So extensive were these gifts that in 1250 A. D. there were 
throughout Christendom about eighteen hundred abbeys of 
the Cistercian order alone. 

To check this accumulation of lands in the hands of the 
Church, Parliament attempted to restrain gifts of land to 
it by law. 3 Nevertheless, in the very reign during which 
the statute was passed over a hundred houses were founded, 
including nearly fifty monasteries, forty-seven hospitals and 
seven colleges. 4 Further mortmain statutes were passed to 
prevent the extravagant donations to the religious houses, 
whose lands at one time amounted to a third of the 


1 Tanner: Notitia Monastics Preface IV. 

2 Ibid: Preface V. 

*9 Hen. Ill, c 36. 

4 Tanner: op. cit., Preface VI. 


8 




of Charitable Institutions 


land of the realm. 1 We find now also that grants and con¬ 
veyances of estates are conditioned on their not being 
alienated to the Religious Houses. 2 

Though from this time on there were frequent and re¬ 
peated attacks on the Church (on a number of occasions 
the Church stood in danger of losing all its possessions) its 
properties were still augmented from year to year. Even 
in the reign of Henry VIII Brasenose and Corpus 
Christi Colleges were founded in Oxford, as was also 
Magdalene College in Cambridge. Five hospitals were 
founded before King Henry started on his systematic sup¬ 
pression of all the religious houses and the confiscation of 
their properties—a measure which opens a new era in the 
taxation of charitable institutions. 

The Origin of But even before the flow of this generous 
Charitable In- stream of bounty the institutional develop- 
stitutions ment of the charitable activity of the 

church had early manifested itself. From the beginning 
the Church became a charitable center. The priest would 
visit the poor and sick at their homes. Then, clustering 
about the church buildings, colonies of poor and infirm 
would appear. With the increase in numbers of the needy 
and the internal expansion of the Church came further 
organization. Gregory divided the territory of the Church 
into bishoprics, deaconries, districts and parishes. It was 
the duty of the head of the parish “to care for the poor, 
widows, orphans, wards and old people of their several 
districts. . . .” In each district was a hospital for alms, 
of which the deacon had charge. 3 

With more complex and wider organization specialized 
institutions were created. At first the church or cathedral 
was a center of relief for the poor as well as the sick, the 
aged as well as the crippled. “In the neighborhood of the 

1 See p. 7, footnote 2. 

2 Kenneth: Parochial Antiquities —Glossary under the word “Religiosi.” 

3 Loch : op. cit., 210-218. 


9 




Historical Origin of Tax Exemption 


cathedrals were gathered together the maimed, the lame, 
the blind, the homeless and the friendless to be fed, clothed 
and cared for for God’s sake.” 1 Then institutions for the 
sick only, or for orphans or foundling children or the blind 
were founded. Furthermore, when the legal disability 
against leaving bequests to the Church was removed, many 
endowed charities appeared. Thus in the Theodosian Code 
are found enumerated various classes of institutions, guest 
houses, poor houses, orphanages, and houses for infant 
children. 2 

But the greatest centers of institutional relief were the 
monasteries. Starting in the east, they spread rapidly to 
the west, where they became influential factors in the relief 
work of the Church. How the monasteries first developed 
is not altogether clear, but it is safe to assert that they were 
the direct result of the ascetic and other-wordly aspect of 
the Christian view of life. Connected with these monas¬ 
teries w r ere also extensive educational facilities. Indeed, 
during the turbulent and troublous times of the early Middle 
Ages there was “no mention of any recognized system of 
relief other than monastic.” 3 

Aid Given by ^ was not > however, by mere gifts of land 
the Secular or precious metal that the church was aided 
Powers by the secular powers. For the enforce¬ 

ment of its decrees and the administration of its charitable 
work the church had often the political arm of the secular 
government to thank. Apart from general exhortations to 
help the sick and needy, Pope Gregory specifically ordered 
at an early time that at least a fourth of the revenue of the 
Church should be devoted for charitable purposes. Charle¬ 
magne, who was a patron of learning and of the Church in 
all its activities, legalized, in his Capitularies, the Gregorian 
rule of consecrating a portion of the Church revenues to the 

1 Gneist: op. cit., I, 74. 

2 Loch: op. cit., 224. 

s Ratzinger: Geschichle der Kirchlichen Armenpflege, 305. 

10 





of Charitable Institutions 


poor. During the chaotic conditions ensuing on the death 
of Charlemagne, the Council of Maintz made a spirited 
appeal that there be not withheld from the poor their just 
share of the properties of the Church. In Saxon England 
the kings lent their authority to the collection of tithes 
owing to the Church, and they enforced the rule that a third 
of the revenues should be distributed to the needy—en¬ 
forced, as it were, an ecclesiastical poor law. 1 


• i T? _ As has been stated elsewhere, the moving 
bpecial Exemp- . \ & 

tions Granted cause or the lavish grants to the Church is 
to Religious to be found in the essentially religious and 
Institutions sentimental quality of the medieval mind. 
Rivalling the liberality of grant were the numerous privi¬ 
leges and immunities accorded to the religious houses in the 
charters of foundation. The privileges enumerated in the 
Saxon and confirmed in the Norman charters refer usually 
to immunity from secular judicial jurisdiction; permission 
to hold fairs and markets, to have free pasture, the right of 
common, etc. Thus King Canute’s grant to the Monastery 
of Glastonbury curiously provided that “no subject could 
enter this (the Monastery’s) district without the permission 
of the abbot or convent.” 2 Often the immunities granted 
would be freedom from the exactions of the nobles, from 
the obligations of forfeiture, from liability to ecclesiastical 
tithes. 3 

Thus, in confirming her charter to the Abbey of Bordes- 
ley, Queen Matilda granted lands (i absque omni consuetu- 
dine seculari et exactione A 4 Similarly King John, in his 
charter to the Templars, wishes them to hold lands t( liberi 
ab omni scott o et geldo et omnibus auxiliis re gum 


1 Chadwick: op. cit., 37—Cf. also: Rot. Pari., IV, 290, where refer¬ 
ence is made to the “ould custome, that thryd parte of the goodes of Holy 
Church shuld be spendyd within the parache opon the pore and the nedy 
of the parache.” 

2 Dugdale: Monasticon Anglicanum, I, 1. 

3 Kemble : Codex Diplomatics, Preface. 

4 Charters in the British Museum, I, 19. 


11 




Historical Origin of Tax Exemption 


et hidaglo et carucagio et denegeldo. ,n In the charter to the 
priory of Spalding the exemption clause reads: u Soluta et 
quieta de omnibus geldis et danegeldis, scutagiis, hydagiis, 
carrugagiis .” 1 2 In the Domesday survey there is found the 
following notation relative to the Monastery of Glaston¬ 
bury: “The Church of Clastingbery has in that town twelve 
hides that were never taxed. . . . The same Church has 
Wineseome, which was taxed at the rate of twenty hides.” 3 
Typical of the charters granted to the religious houses is 
that of Henry II to the Monastery of Glastonbury. 4 

Sir William Dugdale, in his voluminous Monasticon 
Anglicanum, consisting of eight tomes, has given an account 
of the origin and development of all the monasteries, prior¬ 
ies, hospitals, collegiate churches, etc. He prints the origi¬ 
nal charters and all the subsequent grants and endowments. 
Though the tenor and terms of the numerous grants, char¬ 
ters and confirmations vary, there is evident a general ten¬ 
dency to bestow lands on eleemosynary institutions in free, 
pure and perpetual alms, freed from all and any burden or 
exactions whatever. In this fashion the Church was not 
only freed from customary dues, but was the recipient of 
large lands and dues which were diverted from the King 
and his subjects to the peculiar uses of the Church. 

Charters often In passing it may be observed that a charter 
Disregarded of liberties and immunities was binding only 
upon the king who granted it. This is shown by the fre¬ 
quent requests to confirm old charters. 5 When the King 
found himself pressed for money, he thought little of dis- 


1 4 English Historical Review, 108. 

2 Ibid., 108. 

3 Dugdale: op. cit., I, 4. 

4 Reprinted in Dugdale: op. cit., I, 61.—See also, for similar grants, 
Madox: Formulare Anglicanum, 238, 243, 248. 

5 Rot. Pari. VI, 528a.—Where the abbess of the Convent of the Mon¬ 
astery of Sion requests that the letters patent of Henry VII, granting her 
lands in free alms and exempt from all taxes whatever, be confirmed.—Cf. 
also: Les Nouvelles Ordonances, 5 Edw. II, where it is ordained that the 
Holy Church have all their franchises. 


12 




of Charitable Institutions 


regarding charters of exemption. An early trick of the 
King was to claim that his great seal was lost and in conse¬ 
quence charters bearing the old seal were void 1 To regain 
validity the old charters would have to be sealed by the 
King’s new seal—a process which cost the religious houses 
much money in fines. A later practice of the same sort was 
for Parliament to pass Acts of Resumption, recalling all 
grants and franchises accorded by the King. 2 Similarly, we 
find now and then in grants of subsidies a clause levying a 
tax on all properties, “notwithstanding any grant or im¬ 
munity.” 3 

Motivated by a fixed theory that the poor are irradicable 
and that an act of charity is a supreme virtue which will 
receive spiritual reward, the Church set itself to the task 
of charitable relief. Grown rich and powerful through 
numerous bequests, the Church was able to take from the 
hands of the decaying Roman Empire the task of relief and 
enlarge upon it. In spreading as widely as possible the 
sphere of its charitable activities, the Church established 
numerous institutions such as monasteries, abbeys, hospitals, 
almshouses, etc. The growth of these institutions was fur¬ 
ther enhanced by the asceticism of Christian doctrine and 
the aid in land and protection given by the temporal powers. 
In addition this church property, either by historic claim 
which went unchallenged or by virtue of express stipula¬ 
tion, was freed from ordinary temporal burdens which 
rested on the remaining land of the community. In this 
fashion the Church became the exclusive agent of all meas¬ 
ures of relief. All charitable property was necessarily in 
the hands of the Church. 

1 Stevens: Royal Treasury of England, 37, 40. 

2 Rot. Pari. V, 514; Rot. Pari. IV, 403b, 418b. 

3 Such a tax was that of Henry IV in 1495.—Cf. 4 Henry VIII, c 19; 
5 & 6 W. & M., c 14. 


13 




Historical Origin of Tax Exemption 


II 


Primitive 
Taxation a 
Voluntary 
Contribution 

tary services. 


It is well established that primitive taxation 
took the form of voluntary contributions. 
Where defense was the chief concern of a 
community, each man contributed his mili- 
With greater complexity of life there came 
the need of building roads, bridges, buildings. To this pub¬ 
lic enterprise the members of the community made volun¬ 
tary offerings. The notion of direct taxation imposed by a 
central authority was foreign to early communities. Thus 
Tacitus, writing of the German tribes, remarks: 

“It is customary among the states to bestow on the chief 
by voluntary and individual contributions a present of cattle 
or of fruits, which, while accepted as a compliment, supplies 
their wants .” 1 

Manifestly where such a theory of voluntary taxation 
prevails, there can be no question of exemptions. 


Early Exam- The Romans, and perhaps also the Greeks, 
pies of Tax were the first peoples to organize periodical 

Exemption and compulsory levies analogous to the 

practices of modern states. Among the Greeks, certain 
merchants, aliens and the poorer classes, were exempt from 
taxation. Since the administration of charity was a public 
function, the property devoted to this end was obviously 
not taxed. No state taxes its own properties. The various 
temples were owned by the state, or in some cases by local 
districts. Often the coffers of these temples were filled with 
State funds. The expenses of maintaining sacred places 


1 Quoted in Morgan: History of Parliamentary Taxation, 2.—Remon¬ 
strances of the Clergy presented to the King, June 15, 1788, p. 16. “The 
princes [of France] lived on their domains and the presents that were 
given them hy the Assemblies on the field of Mars.”—Seligman: Essays 
on Taxation, 2. “In all primitive societies voluntary offerings constitute 
the first form of common contributions ...” The etymology of early 
taxation is illustrative of this fact; Take for example, such words as 
donum, auxilium, aid, benevolence, precarium, Landbede (from beten, to 
pray), contribution, Steuer (from Steuern, to help). Seligman: op. cit., 5. 

14 




of Charitable Institutions 


were defrayed from the revenue of their lands, which were 
often leased by the State, or from State funds. 1 

Among the Romans the sacred temples and sacred prop¬ 
erties, the res sacrae and res religiosae, were res nullius, that 
is, without an owner. Their theory was that when prop¬ 
erty was dedicated to a sacred or religious use, it passed out 
of the plena potestas of man. He lost all the incidence of 
ownership over it, such as, for example, the power of sale 
or alienation. The sacred property, in some way, passed 
into the control of the divinity. 2 Manifestly such proper¬ 
ties were not taxed, for the reason indicated above, and 
also because, after the Greek fashion, they were supported 
by the State. 

It is not to be assumed that there were no exemptions 
permitted by Roman fiscal policy. Since the power to levy 
imposts rested largely in the hands of the Emperor, and, 
in the Republican period, of the Senate, favorite colonies 
or persons were exempt. Thus, for example, the province 
of Italy was exempt under the jus italicum from a realty tax. 
When these colonies obtained such an exemption, they be¬ 
came juris italici . 3 Furthermore, just as among the Greeks, 
the administration of charity was a public office, and prop¬ 
erty engaged in public service would, in the nature of things, 
not be taxed. 

But with the rise of the Christian Church, charitable 
work passed out of the hands of the State. Private proper¬ 
ties of vast extent were now diverted to religious and chari¬ 
table uses. Were these properties exempt? It seems that 
they were, but not altogether. Says Serrigny: 

“From this period on, these riches kept increasing be¬ 
cause of the immunities and franchises that Constantine and 
his successors accorded the Church. Constantine began by 
exempting the clericals from all civil charges, on the ground 

1 Boelkh: Public Economy among the Athenians, 409-415.—Francotte: 
Les Finances dans les Cites Grecques, 214. 

2 Serrigny: Droit Public Roniain, 218. 

3 Ibid., 95. 


15 




Historical Origin of Tax Exemption 


that they ought not to be deflected from divine service. 
The exemption from personal charges was not the preroga¬ 
tive only of bishops, of priests and of deacons; it was ex¬ 
tended also to inferior clericals. 

“As regards real charges, like the tax on real property, 
the exemption applied only to the effects of the Church; the 
personal effects of the clericals were always subject to im¬ 
post. Constantine, carried away by the neophyte’s zeal, 
first granted exemption to the Church. But his successors, 
struck by the disastrous effect of this exception, which dried 
up one of the most fruitful sources of public revenue, modi¬ 
fied this concession and subjected the property of the Church 
to the ordinary taxes. That is what St. Ambrose formally 
recognized. A novel of Justinian confirms this opinion. 

“The Church and the clericals were exempt from the 
extraordinary and sordid charges, such as the maintenance 
of bridges, the repairing of roads, and other charges of this 
nature. These exemptions, nevertheless, underwent modifi¬ 
cation. Thus the Church was later subjected to the need 
of repairing bridges and the maintenance of roads. Their 
goods were subjected to the ‘transport’ necessary for the 
service of the prince.” 1 

It is to be observed that the term Church is used through¬ 
out, not in a sense limited to the actual buildings where the 
prayers were held, but in a general sense which would, of 
course, include all the charitable and eleemosynary institu¬ 
tions connected with the Church—such as hospitals, mona¬ 
steries, abbeys, nunneries, etc.—which formed an integral 
part of the Catholic Church. Again where the Church 
property was taxed the payments were made by the Church 
on the theory that they were voluntary contributions. Said 
St. Ambrose: 

“If the prince asks for contribution, we will not deny it. 

1 Serrigny: op. dt., 409; Cf. De Flaix: L’Impot dans les Diverses Civili¬ 
sations, I, 223. “The same immunity was accorded the ecclesiastics, the 
religious communities and the goods of the church that the goods of the 
temples formerly enjoyed.” 


16 




of Charitable Institutions 


The lands of the Church will contribute their offering 
(tributum).” 1 

The exemptions of the Church hereinbefore enumerated 
were introduced into France, as was also the notion that 
payments by the Church to the State were voluntary. 

“The exemption from the personal, extraordinary and 
sordid charges was extended in our ancient French legisla¬ 
tion to the ordinary real imposts, of which the clergy had 
the honor of exempting itself, in contributing to the charges 
of the State only under form of a voluntary gift.” 2 

In 1749, when the King of France attempted to levy the 
vingtieme on the clergy, they presented their remonstrance 
in the following vigorous language: 

“The immunities we claim are essentially united with the 
form and constitution of the government itself. . . . 

The Clergy, where possessions are in a special manner 
consecrated to God, destined to divine worship . 
have much more ample prerogatives. They are exempt 
from all impositions of what kind soever. The Date of 
their sacred privilege is the same with the Foundation of 
the Monarchy, is supported by ancient Usage and Custom 
of France, and ought to be placed among the primitive laws 
and fundamental principles on which the Rights of Nations 
depend. They are what the Clergy have peaceably enjoyed 
in the days of Clovis to our present Majesty. . . 

“In the year 1665 . . . Louis XIV asked Succours 

from the Clergy. . . . The Minister who spoke to 

them on the Part of the King, advanced some Propositions 
which put the Clergy under some Apprehensions for the 
Immunities of the Church. . . . And the Clergy had 

the Consolation to be assured from the King’s own Mouth, 
He would tell his Agents . . . that he did not believe 

himself authorized to demand anything from the Clergy, 


1 Quoted in Serrigny: op. cit., 408. 

2 Serrigny: op. cit., 409.—Cf. De Flaix: op. cit. I, 269-280. 

17 




Historical Origin of Tax Exemption 


which they might not refuse or grant him at their Op¬ 
tion. . . . 

“We will not say, Sire, that we pretend by our Exemp¬ 
tions to be dispensed with from contributing to the Charges 
of the State. If we appeal to the Experience your Majesty 
has had of us, have we not given fifty-four millions since the 
last War? We can demonstrate to your Majesty that we 
have furnished the State with two hundred fifty-six mil¬ 
lions, since the beginning of this Century. What Body of 
your Majesty’s subjects can say so much?” 1 

Tax Exemption In Saxon England the Church asserted the 
in England same privilege of immunity from secular 
imposts. Thus Gneist points out in his Chapter on the 
Anglo-Saxon Church: 

“The Canons of Archbishop Ecgbert show us what the 
early Church of those days was aiming at. The parish 
Church was to be endowed with a hide ( mansus) of land, 
and this hide should remain free from all public burthens, 
whilst all property beyond this amount should be subject 
to manorial dues and state burthens.” 2 3 

But in a note Gneist is careful to point out the limits 
set to this ecclesiastical claim: 

“It is true that King Withred of Kent and Aethelbald 
of Mercia declared their wish to free the ecclesiastical 
estates within their realms from ‘temporal burthens, la¬ 
bours, duties and contributions,’ but hereby burthens at¬ 
tached to land were meant, and it is expressly declared that 
the three common burthens, ‘expeditio exercitus, burgorum 
constructio, pontium refectio,’ are not included. Few 
grants to the Church can be cited without the reservation of 
these common burthens which later jurisprudents have styled 
the ( trinoda necessitas! }n 

1 The Remonstrances of the Clergy of France, presented to the King- on 
August 24th, 1749, on Levying the Twentieth Penny, 6, 10, 15. 

2 Gneist: op. cit., I, 83. 

3 Ibid., I, 85. 


18 




i 

of Charitable Institutions 


• r ,, Mention has been made of the claim of the 
Claim of the , , , . _ 

Church to Im- church that it was not subject to secular 

munity from levy. This requires some explanation. 
Taxation After the disintegration of the Roman 

Empire the Church was the only closely knit organization 
of wide power and influence. The Roman Empire in fact 
did not die; like the phoenix of old there rose from its ashes 
the New Holy Roman Empire of the Catholic Church. The 
Church had all the attributes of a modern state. All the 
western world was within the sweep of its jurisdiction; it 
had its own system of ecclesiastical law, administered by its 
own ecclesiastical courts. The numerous papal bulls and 
decrees attested its legislative power. By an extensive and 
intricate fiscal organization it collected the compulsory 
levies like tithes, annates, and first fruits. It had an offi¬ 
cial language—Latin. It had extensive educational and 
charitable institutions. Contrasted with this strength, unity 
and pretension to temporal power of the Church was the 
utter disorganization of the secular power throughout 
Europe. There was, as yet, no English or French nation to 
oppose the pretensions of the Church; these nations were 
still in the making. It is familiar history that both England 
and France were organized on an ecclesiastical basis far 
earlier than on a political basis; indeed, the former was the 
pattern for the latter. 

Moreover, the theological theory was that the lands and 
properties of the Church, which was the supreme spiritual 
power, were in the service of God and therefore beyond 
the reach of secular control. The medieval clerical and 
even secular mind, being intensely religious, readily acqui¬ 
esced in this theory. It was only later, when the papal 
exactions became too onerous, and when the feeling of 
nationality asserted itself, that this theory was challenged. 
Meanwhile, however, the spiritual power of the Church was 
superior to the temporal power of the King; witness the 
fate of Philip the Fair of France and Henry IV of Ger- 


19 



Historical Origin of Tax Exemption 


many. Throughout the earlier, and even the later, Middle 
Ages the kings and nobles, as we have seen, endowed the 
Church with large estate. They also lent their temporal 
power to enforce the ecclesiastic tithes. Says Gneist: 

“The payment of tithes was almost as important for the 
permanent and uniform endowment of the ecclesiastical in¬ 
stitutions as the possession of landed property. As in the 
whole of Christendom, so in England, as early as the end of 
the eighth century, the united exertions of the clergy led to 
a recognition of the right to tithes by the National Assem¬ 
blies of Mercia and Northumbria. A decided legal recog¬ 
nition was first made in Aethelstan’s {< Constitntio de Deci- 
mis, ,} since which time the temporal power agreed likewise 
to these taxes being raised by the royal gerefas. One-third 
part of the tithes was to be expended on repairing the 
Church, a second for the ministers of God, the remaining 
for God’s poor and for needy laborers. Nearly every sub¬ 
sequent reign confirmed afresh the legal liability to tithes 
with the assent of the Wotan. The Church accordingly 
gained a right of direct taxation much earlier than the tem¬ 
poral State.” 1 

The chief reason, however, why the Church’s claim to im¬ 
munity from secular taxation remained unchallenged was 
the absence of any system of organized taxation by the 
temporal powers. Indeed, the Church’s claim to immunity 
was not based on any immediate fear that its properties 
would be levied upon by the secular authorities, but was 
advanced as an additional prop to its contention that the 
spiritual power was superior to the temporal. There was 
no danger of a levy on Church property by secular rulers 
under the then prevalent scheme of taxation. The national 
revenue was obtained from other sources. But when the 
national revenue failed to meet public needs, the King 
cast about for new fields for taxation; and then the question 
of the exemption of Church property became pressing. Such 

1 Gneist: op. cit., I, 64. See also p. 23 supra. 

20 




of Charitable Institutions 


a stage, as will be shown later, was indeed reached in the 
early Norman period; it is then that the bitter quarrel over 
taxing church property arose. 


Sources of Let us exam i ne sources of national in- 
National In- come in Saxon and early Norman England, 
come in Saxon In the first place, the King was one of the 
England largest private landowners. Again, the 

King had control of the folk lands, that is, lands that had 
not been assigned to individuals. Incidentally, let it be 
mentioned that large tracts of this folk land were granted 
to churches, monasteries and charitable foundations. There 
was recognized, also, royal rights over harbors and landing 
places; tolls were collected from ships and foreign mer¬ 
chants and for the use of military roads—the progenitors 
of our customs and dues. Flotsam and jetsam, property 
throw T n up by the sea, naufragium, waifs, estrays, treasure- 
trove, fell into the King’s hands. 

As military leader the King was empowered to call upon 
all freemen to build and repair the royal residences, and 
to perform the trinoda necessitas. His was also the right of 
heriot under which the armour of a deceased vassal fell 
to the King. Vested in the King also was the judicial au¬ 
thority by virtue of which all forfeited property and fines 
found their way into the King’s hands. The protection 
offered to Jews and foreign merchants was also a lucrative 
source of revenue. 1 The ordinary revenue acquired by the 
King in these and other ways was sufficient for the King and 
his government. It must be observed that none of this reve¬ 
nue was raised by direct taxation. “The German chieftain 
might exact tribute from vanquished peoples, but from his 
own people he only received presents, especially cattle and 
fruits.” 2 


1 Medley: English Constitutional History, 485. 

2 Gneist: op. cit., 64, 72. 


21 




Historical Origin of Tax Exemption 


The First The ^ rst an d on ly i nstance a direct tax 
Instance of a in Anglo-Saxon England is to be found in 
Direct Tax the j eV y 0 f the Danegeld, which was im¬ 

posed to buy off the Danish pirates. A national calamity 
had called forth an unprecedented levy. Thus Roger de 
Hoveden, a chronicler of the thirteenth century, quoting 
from Glanville’s Anglican Laws, writes: 

“The payment of Danegeld was first exacted by the rea¬ 
son of the pirates. For, harassing this country, they used 
their utmost endeavors to lay it waste. In order to check 
their ravages, it was enacted that Danegeld should be paid 
yearly (twelve pence for each hide of land). From this 
Danegeld all the Church was free and exempt, and all the 
lands which belonged to the Church, as of its own demesne, 
wherever situated; it paying nothing whatever toward such 
a tax, because more trust was put in the prayers of the 
Church than in its defence by arms. 1 And the English 
Church enjoyed this exemption down to the times of Will¬ 
iam the Younger, who was surnamed Rufus, when he re¬ 
quired aid from the Barons of England in order to regain 
Normandy. ... It was conceded to him, though not 
sanctioned or confirmed by law. . . . While the col¬ 

lection of the tax was being made, the Holy Church pro¬ 
tested against it, demanding her exemption, but she availed 
nothing thereby.” 2 

Introduction of The Norman conquest did not entail a pro- 
the Feudal found change in English social constitution. 
System William the Conqueror, professing to be a 

descendant of Edward the Confessor and to perpetuate the 
legitimate Saxon regal line, took care to keep intact most 
of the Saxon customs and institutions. Thus he promised 
to abide by the laws of Edward the Confessor and ratified 

\ Cf. Thorpe: Ancient Laws and Institutions, 1-5.—The laws of King 
Wiltraed gave “to the Church freedom from imposts, and that the King 
be prayed for, and that they revere him of their own will without com¬ 
mand/’ 

2 Roger de Hoveden (Riley’s Translation), I, 545. 

22 




of Charitable Institutions 


many of the old Saxon charters. The conquest of England 
meant, fundamentally, that one ruling class was substituted 
for another. 

One important change the conquest did involve; that is 
the establishment of feudalism. But it has been stated that 
under the Saxon kings the germs of feudalism were already 
present in England, and that, even if the Norman kings 
had never come to England, feudalism would have sprouted 
there as a native growth. What the Normans primarily 
did was to hasten and accelerate this indigenous growth, 
rather than foist upon England an alien institution. That 
this view seems to be correct is shown by the marked simi¬ 
larity of the sources of revenue of the Saxon and Norman 
kings. 


Sources of 
National In¬ 
come in Early 
Norman 
England 


Under the Normans the King’s customary 
revenue may be classified into ordinary and 
extraordinary . 1 The items composing the 
ordinary revenue were similar to those 
under the Saxon monarchy; in addition, the 
Norman kings received the firma burgi, a lump sum paid by 
some towns for certain privileges granted them, amerci- 
ments imposed by the King’s justices, fees for bringing cases 
into the King’s courts, or for hastening or delaying a trial , 2 
payments for the grant and confirmation of charters, the 
ancient customs tolls, prisages, etc. But the bulk of the 
ordinary revenue consisted of the income from the feudal 
incidents of wardship, marriage, escheat, primer seisin, etc. 

Feudalism, which ramified into every nook and cranny 
of medieval life, shaped also the mode of national taxation. 
Indeed, the feudal method of raising national revenue can- 


1 For a detailed statement of the sources of the King’s revenue the 
reader is referred to Hale: Analysis of the Law and Madox: History of 
the Exchequer. Cf. also: Sinclair: History of the Public Revenue. 

2 Cf. the provision in the Magna Carta that justice be not delayed or 
sold. 


23 




Historical Origin of Tax Exemption 


not legitimately be called taxation; 1 the former was based 
on tenure, a personal relation between lord and vassal, the 
latter is generally based on an assessment of property. 

The extraordinary revenue of the King, collected on in¬ 
frequent occasions, consisted of the following items: I. The 
three feudal aids, of ransoming the King, of helping defray 
the expense of marrying the King’s daughter, and of knight¬ 
ing his eldest son. 2. Scutage, or the money commutation 
of those of the King’s vassals who failed to perform mili¬ 
tary duty. 3. Tallage, levied on the King’s demesne. 4. 
Dona or auxilia, exacted from Jews, the clergy and religious 
and charitable houses. The latter two were arbitrarily ex¬ 
acted by the King. 2 

What relation did the church properties bear to the in¬ 
come of the Saxon and Norman kings? 


Exam le of Vinogradoff, in his English Society in 

Taxation and { he Eleventh Century, collects some illumi- 
Exemptions of nating data relative to the taxation and 
the Church exemptions of the Church. After citing 
instances where the King issued writs of exemption from 
a geld or tax to private individuals because of ancient cus¬ 
tom or personal favoritism, he says: 

“An important group of exemptions is formed by certain 
lands, to which immunity from geld has been granted be¬ 
cause they belonged to Churches. Of course, not all the 
ecclesiastical estates were free from geld—every page of 
Domesday speaks to the contrary, but a good deal of land 
was exempt from the geld in order that it might serve ex¬ 
clusively for the needs of religion and of the clerical pro¬ 
fession. ... A most interesting feature of such con¬ 
cessions is that they were supposed to place ecclesiastical 


1 Medley: op. cit., 443.—“But it is to be carefully borne in mind that 
there existed at first a great distinction between revenue and taxation. 
. . . The earliest attempts at taxation are connected with the invasion 
of the Danes and take the shape of special livies to meet special and 
temporary emergencies.” 

2 Mitchell: Studies in Taxation under John and Henry III, 2. 

24 




of Charitable Institutions 


lands in the same position as those of the King himself.” 1 
The latter were free from payment of the geld. 

The Military Further Prof. Vimogradoff finds that for 
Often Free purposes of taxation the lands held by a 
from Taxation j or( j f or j^g own sus tenance were together 
with those of the Church placed in the same category; that 
is, they were free from geld. The theory was that the 
former, in performing military service, and the latter, in 
performing religious service, were performing functions of 
which the King and the public stood in need. 2 All other 
land had to bear all the taxes imposed by the government. 
After examining the old documents and their clauses of 
exemptions, Prof. Vimogradoff concludes: 

“One inference only remains open to us, namely, that 
these documents accept and follow out consistently the prin¬ 
ciple that two shares ought to be made of the land on which 
the fabric of the commonwealth of those times was resting, 
one share being geldable to the King, and the other minister¬ 
ing to the wants of the soldiers and priests who were serv¬ 
ing the State and society in their respective callings.” 3 

Thus the clericals, together with the military, were a 
privileged class. Because they fought and prayed, they 
did not pay. The immunity of the Church was grounded 
on the public need of religious and ecclesiastical activity. 

™ _ .• Indeed from the earliest times we find that 

lax Exemption . . 

the Reward of the root cause or exemptions, which do not 

a Particular arise from the accident of race, birth, rank 
Service an d t ^ e or f rom the w him or favor of 

the rulers, is the performance of some function deemed 
socially desirable at any given time. Thus the Hebrew 
priests were a privileged class, supported by contributions 
of the community, because the religious function which they 

1 Vimogradoff: English Society in the Eleventh Century, 18 2. 

2 Ibid., 186. 

3 Ibid, 190. 


25 




Historical Origin of Tax Exemption 


performed was a vital one in the Jewish commonwealth. 
This would be apt to be the case in any community that was 
intensely religious. Constantine exempted the Church so 
as not to deflect it from its divine service. Princes and high 
functionaries of the Chinese Empire were made to pay with 
difficulty; in India the Brahmans were exempt; in Persia, 
the priests; in Athens, certain citizens because of particular 
services. 1 Frederick the Great freed the military from 
taxation. In 1489 the Bavarian Knights asserted that they 
served their Duke with their lives (Gut und Blut) and not 
with money (Geld). In 1484, in the French Estates Gen¬ 
eral the defense of tax exemption was that the clergy prayed 
for the people, counselled and exhorted them, the nobility 
protected them in the field, and the people were to feed the 
other two classes by the payment of taxes and the cultivation 
of the soil. 2 In England, Henry I exempted his tenants 
by knight’s service from all demands. 3 


Church Prop- The Norman Conquest, as we have seen, 
erties and the introduced the Feudal system into Eng- 
King’s Revenue l an T The Church did not altogether 
escape this process of feudalization. Many religious houses 
held land of the King by military tenure, whereby they had 
to supply the King with soldiers, and were subject to the 
usual aids, escheats, etc., like any lay tenant. 4 But most of 
the land devoted to church and charitable uses was held in 
frankalmoigne, or, put in another way, in free, pure and 
perpetual alms. 5 6 That is, the holder of these lands owed 
no service, military or servile, to any lord. Such lands were 


1 De Flaix!: UI inpot dans les Diverses Civilisations , I, 220-25. 

2 Roscher: Finanzwissenschaft, 350, says “The most important tax ex¬ 
emptions come originally from personal service which . . . has been 

rendered to the state. ... In the later middle ages this was true of 
the clericals as well as of the military.” 

3 Stubbs: English Constitutional History, I, 331, 622. 

4 Rot. Pari., I, 321b, 331a., where there were pleas of exemption from 
aids on the ground that the lands were hold in frankalmoigne. Similarly 

in Rot. Pari., II, 219b, the Prior of Workshop was freed from an aid on a 
finding that he held in free alms. See also, Rot. Pari., Ill, 218b. 

6 Stubbs: Essays in English Constitutional History, 26 (note). 

26 




of Charitable Institutions 


held in perpetuity, free from the ordinary feudal exactions. 
Since up to the time of Henry II there was no scheme of 
public taxation other than feudal, it may be said that these 
charitable institutions were exempt from taxation. But it 
is to be borne in mind that they enjoyed this immunity be¬ 
cause by the terms of their contract of tenure they fell out¬ 
side any feudal claims. 

However, when a shift in the bases of taxation was made 
under Henry II, that is, when taxation began to be based on 
property and not on tenure, we find the religious and chari¬ 
table houses subject to the general levy . 1 

Normally the ordinary revenue of the 
King would suffice for the needs of the gov¬ 
ernment. The King would thus be able “to 
live of his own.” On infrequent occasions 
the extraordinary revenue was collected. 
But as early as the twelfth century a num¬ 
ber of events occurred which drove the Kings to seek new 
fields of revenue. The numerous wars of the English 
Kings, the expensive crusades, the extension of the govern¬ 
mental functions under Henry II, such as the creation of 
the King’s courts, the monopolization of criminal law liti¬ 
gation, etc., overtaxed the customary revenue of the King. 
Moreover, owing to changing economic conditions, there 
was gradually appearing a good deal of personal property 
which feudal taxation, based entirely on land tenure, left 
altogether untouched. 

The Kings’ efforts to augment the national revenue were 
exerted in two directions. On the one hand, they sought to 
increase the old feudal burdens, and, on the other, they 
sought to impose levies of an entirely different category. 
It was this latter attempt to pick up revenue outside the 
ordinary feudal channels that laid the basis of modern tax- 

1 Stubbs: English Constitutional History, I, 622. “He (Henry II) 
brought at once under contribution the lands held by the churches, which 
had often claimed, but had never perhaps secured immunity.” 

27 


Necessity of 
Increasing the 
Royal Revenue 
the Basis of 
Modern Tax¬ 
ation 




Historical Origin of Tax Exemption 


ation, which is based on property assessment. The new 
levies, which, because they were more profitable, gradually 
supplanted the feudal taxes, were, first, taxes on personal 
property 1 —the tax on movables—and, second, the hidage 
or carcucate, the taxable unit of which was the ploughland 
of 120 acres. 

The Struggle As ls natura l to suppose, these efforts on 
between King the part of the King to increase the royal 
and Church revenue met with determined opposition. 
The opposition came from two sources, that is, from the 
barons, on the one hand, and from the clergy and religious 
houses, on the other. To check the rapacity of King John 
the nobles compelled him to accept the Magna Carta, which 
cut down the King’s aids to three and which cut down the 
King’s power to levy taxes without the consent of the realm. 
This struggle over parliamentary control of taxation, fasci¬ 
nating as it is, need not concern us because it lies beyond the 
confines of this essay. 2 But the story of the struggle between 
the King and the Church falls within the current of this in¬ 
quiry, because a decisive element of that struggle is the his¬ 
toric claim of the latter of immunity from lay fiscal com¬ 
pulsion. 

Owing to the large number of gifts to the Church, its 
properties reached enormous extent. From the rents and 
profits of its land, from the ecclesiastical tithes, offerings, 
etc., its revenues outrivalled those of the largest land- 
owners. 3 Owing also to the terms of its tenure, the Church 
was free from the ordinary incidence of feudal tenure such 
as aids, escheats, etc. Very often express grant or franchise 
freed the Church from all other tolls and exactions. This 
anomalous situation, where large properties of great eco¬ 
nomic productivity were free from taxation, bore heavily 

1 Rot. Pari., V, 151a. 

2 For an admirable study of this subject see Morgan: History of Parlia¬ 
mentary Taxation. 

8 Boutmy: English Constitutional History, 77. 

28 




of Charitable Institutions 


upon other properties and called forth loud protestation. 

Little wonder, then, that when the Kings found them¬ 
selves in straitened circumstances they turned to the Church 
for financial comfort. One of the earliest reforms of Will¬ 
iam the Conqueror was to subject many houses holding in 
free alms to the burdens of military tenure. 1 Thus some of 
the time-long immunities of the Church were cut down. 
Similarly the King by force majeure appropriated to his own 
use much of the wealth of the Church. In 1070 King Will¬ 
iam I caused all the monasteries to be searched and carried 
off much of their plate and many of their jewels. He spared 
neither the chalices nor the shrines. 2 Under William Rufus 
the religious houses fared still worse. Nearly all of them 
were seized by the King and despoiled of their wealth for 
the King’s private gain. 3 The Church lands were now even 
subjected to the Danegeld, from which by the early Saxon 
laws they had been exempt. 4 

Henry II and But it was not until the reign of Henry II 
His Taxation that the basis of modern taxation on a na- 
Policies tional scale was laid. It was owing to the 

efforts of this monarch that the foundation of a strong king- 
ship was laid in England earlier than in any country of the 
continent. By vesting with the crown the numerous judicial 
and legislative powers customarily exercised by the barons, 
by depriving the latter of their military strength, the King 
gradually broke down the rigid framework of the feudal 
order and brought under contribution classes and proper¬ 
ties that did not fit into the strict mosaic of feudal taxation. 
In other words, by introducing non-feudal taxation Henry II 
was able to tax the property of the Church. 

1 Sir William Temple: Introduction to English History, 175. 

2 Mathew Paris: Historia Majora (Madden’s edition), I, 13.—Adams: 
Political History of England, 23. “. . . The Churches and monasteries 
whose lands were free from confiscation seem to have suffered heavy- 
losses of their gold and silver and precious stones.” 

3 Mathew Paris, op. cit., I, 45, 997.—Similar depredations were made by 
Richard I and John. 

4 Stevens: The Royal Treasury of England, 5. 

29 




Historical Origin of Tax Exemption 


The practice had arisen for clericals who held property 
by military tenure to pay a sum of money by way of com¬ 
mutation for this service. Henry now made this payment 
of money in lieu of military service compulsory for all his 
tenants. From this scutage, as it was called, houses hold¬ 
ing by tenure other than military were exempt, however. 1 
Owing no service to begin with, the religious houses were 
logically not bound to pay this scutage. 

But the most far-reaching innovation of King Henry II 
was his tax on movables or personal property. 2 There is 
evidence of such a tax for the defense and support of the 
Eastern Church as early as 1166 , but the first national levy 
on movables was the famous Saladin Tithe of 1188 . The 
Christian nations were preparing for a crusade against the 
Saracens, and to defray the expenses of the expedition the 
King levied this tax. It was ordered that “every one should 
give a tenth part of his revenues in the present year, and of 
his chattels by way of alms, as a subsidy to the land of 
Jerusalem, the following articles being exempted therefrom: 
the arms, houses and garments of men-at-arms, and the 
houses, books, clothes, vestments, and all kinds of sacred 
vessels belonging to the clergy, as also all precious stones 
belonging to either the clergy or laity.” 3 It was further 
enacted that the clergy and knights who would take the 


1 Madox : History of the Exchequer, 466 . 

2 Custom gradually fixed the percentage of lay goods to be a fifteenth or 
a twentieth, of clerical properties usually a tenth, occasionally a fifteenth. 
It must be borne in mind that only rarely were new assessments made, 
and a lay fifteenth or a clerical tenth became in effect a fiscal expression 
for a fixed sum of money, irrespective of the enhanced value of the prop¬ 
erty taxed.—See Dowell: History of Taxation and Taxes, I, 187 .—This 
was also true of the Tudor subsidies. The enhanced values of properties 
thus escaped taxation. It is conceivable how, despite the frequency with 
which the aids and subsidies were levied, the Kings were in constant want 
of money. This also explains the devious methods employed by them to 
raise revenue, like benevolences, forced loans, and, in some cases, confisca¬ 
tion. 

3 Stevens: op. cit., 38 .—Adams : Political History of England, 376 .— 

“All classes, clerical and feudal . . . were compelled to contribute 
according to their revenues. . . . All privileges and immunities of 

clergy and Church were suspended. The Cistercians even, who had a 
standing immunity from all exactions, gave up their whole year’s shear¬ 
ing wool, and so did the order of Sempringham.” 

30 




of Charitable Institutions 


cross and serve personally in the expedition would be free 
from this levy. From this time on we find among the sources 
of the King’s revenue occasional grants of money by re¬ 
ligious houses under the name of auxilia or dona. The 
occasion engendering these dona and the manner of their 
grant merit detailed consideration. 


Instances of the Richard the Lion-hearted, returning from 
Levying of a crusade to the Holy Land, was captured 
Special Taxes by Austrian Emperor and held for ran¬ 
som. By the feudal law only the King’s tenants were bound 
to ransom him. Nevertheless, it was an occasion for a sub¬ 
stantial levy on church and religious property. 

“For defraying that Expense a Tax was laid, being the 
fourth Part of the Revenues of all Persons, as well ecclesi¬ 
astical as secular, for one Year, likewise the fourth Part of 
all their Movables and twenty shillings of every Knight’s 
fee. Besides, the religious Orders of the Cistercians and 
Sempringham, which had never before been liable to im¬ 
positions, were liable to give all their Wools for that year. 
The Clergy gave their Gold Chalices and much other Plate 
belonging to their Churches.” 1 

At war with France, the King in 1198 levied an aid of 
five shillings on each carucate or hide of land. “Frank-fees 
of parish churches were exempt from the said tallage.” 2 The 
men of the religious orders, however, refused to pay this 
tax, whereupon the King issued an edict depriving any 
“clerk” of any remedy against one who committed an of¬ 
fense against him. “In consequence of which the members 
of the religious orders were compelled to ransom them¬ 
selves.” 3 

Under John and Henry III the practice of putting the 
religious houses under further contribution continued in 

1 Roger de Hoveden, II, 292. 

2 Ibid., II, 421. 

3 Ibid., II, 437. 

31 




Historical Origin of Tax Exemption 


enhanced measure. 1 In 1199 John crossed over to France 
to wage war against the French King. To defray the ex¬ 
penses of the expedition he demanded, besides certain levies 
of scutage and tallage, dona or auxilia from religious houses, 
whether they held by military service or not. In this case 
houses which held by military service paid both a scutage 
and an auxilium. The next year John levied a carucage 
of three shillings on all ploughland under cultivation. From 
this general tax were exempt, however, the religious 
houses, 2 though the chroniclers speak of the tax as levied 
“de universitate Angliae.” 3 For this exemption, however, 
the religious houses paid lump sums by way of commuta¬ 
tion. 4 Many religious houses, particularly the Cistercians, 
opposed the tax, claiming immunity. The King resorted 
to the familiar practice of placing the recusant houses be¬ 
yond the protection of the law. In 1201, 1203 and 1204 
we find further record of dona by religious houses not 
holding by military tenure. However, when John levied 
his thirteenth on movables, in 1207, so much opposition 
developed on the part of the religious houses that their 
property was not assessed, though they perhaps paid lump 
sums by way of a fine. There followed the struggle between 
the barons and John, culminating in Magna Carta. Tax¬ 
ation for a while was at a low ebb. 

With the advent of King Henry III taxes again bore 
heavily on the land. To avoid the danger of losing the 


1 For much of the data during these two reigns the writer is indebted 
to the excellent book of Prof. Mitchell: Studies in Taxation under John 
and Henry III, which collects the early entries in the Close, Pipe and 
Patent Rolls. 

2 Liebermann : Ungedruckte Anglo-Normanische Geschichtsquellen, An- 
nalen S. Edmonde, 139.—The chronicler says, to be sure, that the tax was 
levied “per totam Angliam,” but he adds “exceptis carucis vivorum reli- 
giosorum.” 

3 Prof. Mitchell suggests that certain documents at the Record Office 
regarding an assessment of three shillings might refer to the carucage of 
1200. But in view of the fact that the chronicler expressly states that the 
“vivorum religiosum” were exempt, the documents must refer to an earlier 
carucage, because in the latter levy, as Professor Mitchell says, were 
included the “lands of priors, abbots, bishops, Templars and churches.” 

4 Liebermann: op. cit., 139. 


32 




of Charitable Institutions 


English possessions in France, the nobles and tenants in 
chief of the realm granted the King an aid of a fifteenth 
of personal property to carry on a campaign of defense 
(1225). Among the classes paying this aid were the re¬ 
ligious houses which did not hold by military tenure. 
“There is a demand . . . for the goods of abbeys, 

priories and other religious houses and their men who do 
not hold by military tenure.” 1 

There were, however, variations in this levy which must 
be noted. “There were some, however, among whom were 
the Cistercians and Premonstratensians, who did not pay 
on the assessed value of their property, but fined for it in¬ 
stead. This fine was called a fine for the fifteenth. The 
Cistercians compounded in some way, both for the revenues 
of their churches and for their lands. According to one 
writer, they paid a lump sum of 2,000 marks; and we know 
that in June, 1226, they paid the King 1,000 marks. The 
Templars paid 5,000 marks. The Hospitalers were ex¬ 
empt, but later paid a sixteenth of their benefices.” 2 

In 1232 the barons, to help the King pay his debts, again 
granted him an aid of a fortieth of movables. Some orders, 
like the Cistercians, obtained a writ of exemption. But 
though their property was not assessed, they probably paid 
lump sums by way of commutation of the tax. 

In 1235, to help the King give one of his daughters a 
dowry, the Council granted the King a scutage of two marks 
per fee and a donum from houses not holding by military 
tenure. The order of Cistercians, the Premonostratensians, 
and the order of Sempringham were exempt. 3 

Importance of In 1250 King Henry III, for a promise to 
the Norwich undertake a crusade, obtained a three-year 
Taxation grant from the Pope of a tenth of all cleri¬ 

cal revenues, temporalities and spiritualities. The clericals 

1 Mitchell: op. cit, 159. 

2 Ibi-d., 163. 

3 Ibid, 212n. 

33 




Historical Origin of Tax Exemption 


at first refused to pay, but upon the King’s consenting to 
observe the charters and redress certain grievances of the 
clergy, they consented. The tax was collected in 1254. 
The noteworthy feature of this so-called Norwich Taxation 
was that a new, careful and stringent assessment of all the 
lands and movables of the religious houses was instituted 
by the King. This superseded the old assessments of the 
clerical properties which had formed the basis of papal tax¬ 
ation. So stringent was this new assessment that two hos¬ 
pitals for lepers, the Abbey of St. Albans and the Nunnery 
of Sopwell, were put under contribution though they were 
entitled to be exempt. 1 

Let us here summarize the account of the 
the^Grov^lf oi g rowt ^ custom of taxing religious 

the Custom of and charitable houses. The properties of 
Taxing Relig- the Church were claimed on theological 
ious and Chari- g roun ds, and often by express grant, to be 

free from the taxation of the King. Only 
the ordinary feudal dues stipulated by the contract of tenure 
were to be collected, but no others. So long as the King 
was able “to live of his own,” the boast of the Church went 
unchallenged. But when the customary revenue of the King 
proved insufficient for governmental needs, we find the prop¬ 
erties of the Church brought to contribution. However, 
during the reigns of William I, William Rufus and Stephen, 
the levies on the Church were really acts of depredation 
rather than legal impositions. The arbitrary power of 
William I and the disordered conditions during the reigns 
of the other two kings brought the Church properties within 
secular control. 

These properties were of two kinds: In the first place, 
there were the temporalities or rents and profits accruing 
from the lands of the Church, from bequests, the plate 

1 Rose Graham: The Taxation of Pope Nicholas IV, 23 English His¬ 
torical Review, 434-6. Mathew Paris calls this “an innovation unheard 
of in the centuries.” 


34 




of Charitable Institutions 


ornaments, jewels, etc. In the second place, there were the 
spiritualities or tithes and offerings to the religious houses, 
which formed no small portion of their wealth. 1 It was 
under Henry II that the Church properties legally became 
legitimate subject of regal taxation. Against this initial 
extension of royal power the religious houses, together with 
all the clericals, protested vigorously; nor did they cease 
to protest even though they were constantly constrained to 
pay. Thus under Henry II Archbishop Theobald objected 
to the payment of scutage by the bishops. 2 Similarly when 
John, in 1202, asked for an aid of the spiritualities of the 
Church, the prelates indignantly refused 3 That the Eng¬ 
lish kings gave countenance to this claim of immunity on the 
part of the Church from taxation is borne out by the re¬ 
peated provisos in the King’s writs that the assessment 
should not be held as a precedent. Thus in the levy of 1230 
Henry, in his letters patent to the bishops, stated that their 
aid should not form a precedent for future levies. This 
was also true of the levy of 1235. 4 Further, we find recog¬ 
nition by the kings that the levies proceed “from the free 
grace” of the donees. 5 

But with the advent of new taxes, those on movables and 
on ploughlands, taxes now based on property and not on 
tenure, old claims of immunity tend to disappear. Thus 
under the Saladin tithe all Church property, temporalities 
and spiritualities, must have been taxed, since it was thought 
necessary specifically to exempt the books, sacred vessels, 
etc., of the religious houses. Similarly in the case of 
Richard’s ransom, we find no exemption of any Church 
revenues; even the vessels and gold and books, exempted in 
the ordinance of the Saladin tithe, are now brought under 


1 Medley: English Constitutional History 611; Stubbs: English Consti¬ 
tutional History II, 171. 

2 Ibid., II, 180. 

3 Mitchell: op. cit., 189. 

4 Ibid., 209. 

5 Sinclair: History of the Public Revenue, I-II, 86.— ‘The Archbishop 
of Canterbury declared (1385) that the clergy were freehand were only 
to be taxed themselves.” 


35 




Historical Origin of Tax Exemption 


contribution. In Richard’s carucate of 1198 only parish 
churches were exempt, probably because of their poverty. 

But the direct precedent for the taxation of the religious 
houses by the King was the taxation of the latter by the 
Pope. 1 As was stated earlier, the papacy had a highly 
developed fiscal administration which directed to the papal 
coffers a flow of contributions from Church properties 
throughout the western world. 2 These papal exactions 
formed a standing source of irritation and conflict between 
the kings of Europe and the papacy. The struggle between 
Henry II and Becket, Frederick II and Gregory, Philip the 
Fair and Boniface, was in a sense one over the power to 
tax Church domains. The Reformation itself has been set 
down as a culmination of the struggle over the papal power 
to tax. 


Results of the ^ an ^ rate > * or reasons mutual bene- 
Alliance be- fit, an alliance was established between 
tween King Henry III and the Papacy. The origin of 
and Pope this union of King and Pope dates back to 

the time of Henry II. “For papal assistance. . . . 
Henry (II) and other Kings after him had to pay the price 
by suffering the Pope to introduce, in various forms, taxes 
upon the clergy for various objects.” 3 By way of compen¬ 
sation for the King’s permission to levy a papal contribu¬ 
tion on English Church revenue, the Pope often appealed 
to the clergy to make contributions to the King. Thus in 
1226 the Pope wrote a letter to the clergy asking that they 


1 Mitchell: op. cit., 14. 

2 There were numerous complaints against papal exactions. Cf. Rot. 

Pari., I, 217a, and II, 337b, where these foreign taxes were alleged to 
cause ‘meschiefs and damages.”—Cf. Sinclair, op. cit., I-II, 35.—“England 
was deservedly accounted one of the richest jewels in the papal crown. 
* '-a the reign of King John an annual tribute of 700 marks was’ 

paid for England . . . every house in the kingdom in which there was 
twenty^ penny worth of goods paid a penny yearly to the Pontiff or his 
legate. In addition, there were numerous “pensions, procurations dis¬ 
pensations, fruits for provisions,” etc., “to the great decay and impoverish¬ 
ment of the Kingdom.”—25 Henry VIII, c 1. 

* Makower: Constitutional History of the Church of England. 27, 33. 

36 


v 




of Charitable Institutions 


give the King a grant of a fifteenth of their revenues. As 
early as 1184 the Pope sent his nuncio to England to levy a 
tax on the clergy. In 1229 Gregory IX sent his nuncio, 
Stephen, to demand a tenth of all Church properties and 
revenues. From that time we find recurrent papal taxes in 
England, and recurrent exhortations by the Pope to the 
clericals to contribute a portion of their revenues to the 
King. 


Origin of the For S rant ^ n g °f these taxes by either 
Custom of Vot- the Pope or King the custom arose of as- 
ing Taxes in sembling the clericals to obtain their con- 
Convocation sent. This consent of the clericals becomes 
essential, in theory at least, to the validity of the tax. Thus 
there are many instances of a refusal to pay because of in¬ 
complete representation of the clericals. The necessity of 
consent on the part of the clericals gives color to their as¬ 
sertions that their payments are of the nature of gifts or 
dona. By the provisions of Magna Carta no land tax could 
be levied except by consent of the Council. Although this 
provision was omitted in the next edition of the charter, 
and never thereafter restored, 1 the custom was that the con¬ 
sent of the Council was required to the validity of a tax. 
Where, however, groups like the religious houses not hold¬ 
ing by military tenure were not represented in the Council, 
the tax theoretically was not binding upon them. 

The custom arose, therefore, for the King or his repre¬ 
sentative to negotiate with an assemblage of those unrepre¬ 
sented in the Council with regard to the payment of money. 
In this fashion the practice arose for the clericals to vote 
their taxes, not in Parliament, but in separate convocation. 2 
It is readily seen also why, just because of this method of 
payment, the clericals should find further reason for their 
claim that whatever payments were made by them were 

1 Maitland: Constitutional History, 70, 95. 

2 Stubbs: op. cit., II, 196, 563; III, 349. 

37 




Historical Origin of Tax Exemption 


purely voluntary auxilia. This idea is admirably put by 
Prof. Mitchell: 

“The dona from religious houses were in theory purely 
voluntary. In practice, they may be regarded as compul¬ 
sory. By 1250 they were taken with some regularity. 
Whenever the King took an aid from other classes, or when 
he made an expedition to France, the religious houses usu¬ 
ally paid dona. In 1248 a further step was taken by 
Henry III when he collected dona from them, although no 
other class made him a contribution. We may say, there¬ 
fore, that when he was in great need the King was establish¬ 
ing the right to take dona from the religious houses. The 
sums paid were not based on assessed valuation, and there 
was no concerted action among the heads of the houses. 
Each paid a lump fixed by a bargain between the royal offi¬ 
cer and the house.” 1 

Again, speaking in regard to the liability of religious 
houses to taxation, though they were not represented in the 
Council, Prof. Mitchell says: 

“When the King received a grant of a tax on personal 
property from the great Council, he demanded it from all 
sorts of religious houses. In order to escape paying any 
tax at all, to avoid the assessment of their property, or to be 
allowed to fine, these houses had to get a special writ from 
the King. When they fined, their fine was called a fine for 
the fifteenth. Thus the presumption was that they owed 
the tax. This looks very much as though the King felt that 
the grant in the great Council empowered him to collert 
from them, although they were not members of the Council. 
If, however, we remember that it was customary to collect 
dona from religious houses when scutage was levied, or 
even when no scutage was taken (1248), it will seem prob¬ 
able that the King was following this custom in connection 
with the aids on personal property, rather than levying a 
tax by the authority of the great Council. 


1 Mitchell: op. cit., 14. 


38 




of Charitable Institutions 


“Nevertheless a change had been brought about in the 
relation of the religious bodies toward taxation, which was 
due to the fact that taxes were levied on property. In the 
case of the ordinary dona, no house would be liable unless 
it were approached by officials especially appointed to ask 
for a contribution; in the case of the dona taken in connec¬ 
tion with the aid on movables, the mere fact that a house 
possessed property rendered it liable to assessment by the 
ordinary assessors of the country.” 1 

Heavy Exac Under Edward I the religious houses bore 
tions Borne by particularly heavy exactions. Reviving the 
Religious practices of the Conqueror and his son, 

Houses Edward on a number of occasions searched 

all the religious houses and converted to his own gain all 
their money, jewels and plate. 2 In a mood prophetic of 
Henry VIII, Edward seized into his hands many alien 
priories and confiscated their lands and revenues. 3 This 
process of confiscation is not exceptional in English history. 
Edward II dissolved the order of the Knights Templars, 
and to prevent their lands from escheating to their lords, 
and to perpetuate the purpose for which they were origi¬ 
nally granted, he bestowed them upon the Hospital of St. 
John of Jerusalem, 4 which in turn was dissolved by 
Henry VIII. Edward III and Henry V seized the remain¬ 
ing alien priories. Much of these properties remained in 
the hands of the King, but a considerable portion was 
granted to favored institutions. Indeed, many colleges, 
like Eton and King’s College, were founded with these con¬ 
fiscated properties. 5 

But these seizures were exceptional sources of revenue. 
Whenever the King was at war with the Scots or with the 

1 Mitchell: op. cit., 389. 

2 Stevens : op. cit., 28, 83. 

3 Tanner: Notitia Mcnastica, Preface VI. 

4 17 Ed. II, Statuum de Terris Templariorum, 

6 Tanner: op. cit., Preface VIII. 


39 




Historical Origin of Tax Exemption 


Welsh, or pretended to set out on a crusade, the religious 
houses would grant him a tenth of all their spiritual and 
temporal revenues, now for one year, occasionally for two 
or three years. As an expression of gratitude for expelling 
the Jews out of the land the clericals made the King a gift 
of a tenth of their revenues. Occasionally Parliament 
would grant the King a tax on condition that the clericals 
and religious houses contributed their tenth; sometimes the 
clergy would grant an aid on condition that the King re¬ 
dress grievances or affirm charters of liberties. 

Only in one instance did the King experience some diffi¬ 
culty in exacting the “voluntary” grants or auxilia from the 
clericals. The King having quarreled with Pope Boniface, 
over the King’s taxation of the Church, the Pope issued 
his famous Clericis laicos, forbidding all ecclesiastics from 
paying any taxes to the secular power without consulting the 
Pope. And when the King asked an aid of the clergy in 
1296, they held a general convocation and decided to obey 
the papal bull and brave the anger of the King. Edward 
resorted to the methods of John and Richard. He out¬ 
lawed the clergy, depriving them of any legal remedy for 
wrong done them by a lay person. “Wavering in their 
minds like women, as if they had been in the King’s Secrets” 1 
the clericals made their peace with the King by granting 
him a fifth part of their possessions. 

Importance of There remains to detail one occurrence 
the Taxatio during this monarch’s reign which throws 

Ecclesiastica a fl 00 d of light on the extent to which the 
properties of the religious houses were taxed. In 1291 
in consideration of King Edward’s promise to relieve the 
Holy Land, Pope Nicholas granted the King a tenth of all 
the revenues of the clergy, spiritual as well as temporal. 
The old Norwich assessment of 1254 was disregarded, and 
a new Domesday survey of all Church lands was rigorously 


1 Stevens: op. cit., 90. 


40 




of Charitable Institutions 


prosecuted. This assessment was embodied in a document 
known as the Taxatio Ecclesiastica. The values enume¬ 
rated in the Taxatio formed the basis of the taxation of 
the religious houses up to the time of Henry VIII. 

But after this taxation of Pope Nicholas IV in 1291, in 
the twentieth year of Edward’s reign, the stream of gifts 
and grants to the Church, as we stated earlier, continued 
in uninterrupted flow. Obviously if the assessment of the 
Taxatio formed the basis of taxation, a considerable por¬ 
tion of Church properties would escape the clutches of the 
King. But the crafty monarch ordered the royal assessors 
to assess in the subsidies granted by the laity the lands ac¬ 
quired by the clericals since 1291, which were not included 
in the grants by the clergy. From this time on we encounter 
the phrase “temporalities annexed to their [clergy] spirit¬ 
ualities.” 1 The latter were the temporalities included in 
the assessment of the Taxatio. All lands acquired since 
1291, as the Rotuli Parliamentorum attest, were taxed in 
the lay subsidies. Even where no specific instructions were 
given to the assessors to assess the properties acquired after 
1291, the practice established by Edward I was followed. 
The records of Merton College and of some monasteries 
show payments on their personal property and on their 
wool. 2 

Thus Henry VI ordered that the men of Holy Church 
should pay subsidies on all lands purchased after the reign 
of Edward I. 3 Again we find complaints that the King’s 
sheriffs, in assessing the property of the clericals for a lay 
subsidy, included the “temporalities annexed to the spiritu¬ 
alities,” 4 and a prayer that the temporalities annexed to the 
Churches for which the clergy are taxed a tenth be not taxed 

1 See pages 34-35. 

2 Willard: The English Church and Lay Taxes of the Fourteenth Cen¬ 
tury —4 University of Colorado Studies, 207. , 

3 Rot. Pari., Ill, 246a.—Cf. Rot. Pari., Ill, 7a, 75b.—Rot. Pari., Ill, 
645b. 

*Rot. Pari., II, 229b. 


41 




Historical Origin of Tax Exemption 


again a fifteenth on a lay subsidy. 1 But the Commons found 
occasion to complain also. To their plea that the clergy 
be charged on all their lands, the King’s “Responsio” was: 

“All those men of Holy Church who have purchased 
lands or tenements since the twentieth year of King 
Edward, son of King Henry, shall contribute to the twen¬ 
tieth for the lands and tenements so purchased.” 2 Soon 
thereafter the King ordered that all lands purchased in 
frankalmoigne since the twentieth year of Edward I be 
exempted from a general land tax because they were already 
included in a tenth granted by the clergy. 3 In 1371, when 
the Church had fallen out of favor, the parishes throughout 
the realm were taxed, except those Church lands acquired 
before the twentieth year of Edward I and already taxed 
in the clerical tenths. The King’s order was: 

“Excepted in the grants [are] the lands and possessions 
of Holy Church of the realm amortized before the twen¬ 
tieth year of the King and taxed with the clergy in the 
tenth.” 4 This is as it should be and conforms to the old cus¬ 
tom. A number of years later a general tax on all lands 
and annuities was laid. From this tax all spiritual persons 
were exempt only with regard to their properties acquired 
before the twentieth year of Edward I. Properties ac¬ 
quired after that year were to be taxed. Says the King’s 
writ: 

“Yat no persone Espirituell be charggd be this for- 
seide Graunte, of any Manoirs, Landes, Tenements, Rentes, 
Annuitees, Offices, or any other Possessions Temporels; 
savyng only of the Manoirs, Landes, Tenements, Rentes, 
Annuitees, Offices and Possessions purchased or amortised 
sithen the XX year of Kyng Edward the First.” 5 


1 Rot. Pari., Ill, 176a. 

2 Rot. Pari., Ill, 645b. Rot. Pari., II, 163a. 

3 Rot. Pari., Ill, 648b; Rot. Pari., Ill, 218b. 

4 Rot. Pari., II, 3042. 

5 Rot. Pari., IV, 487a; Rot. Pari., V, 152b. 

42 




of Charitable Institutions 


No Exemption Thus it is seen that no portion of the prop- 
of Church erty of the Church escaped the royal asses- 
Property sor } As the expenses of the government 

increased the royal requests for clerical aids and subsidies 
became more onerous and frequent. Nevertheless, they 
paid so “that by giving a considerable part they might 
prevent the seizing of the whole.” 1 2 In the year 1404 the 
Church barely escaped having all its properties confiscated. 
From the Parliament assembled in that year all lawyers 
were excluded, by reason whereof it is known as the Lack- 
Learning Parliament. 

“Having got together this ignorant multitude, he (King 
Henry IV) found himself in worse plight than with those 
that understood more. . . . These poor dull souls 

would not be outdone ... in the value of their gift, 
but then they knew not where to raise it. At length, after 
many non-sensical Projects, some wise Head among them 
hit upon one worthy of that Assembly, and they all ap¬ 
proved of it: which was to seize all the Revenues of the 
Church at once, take away all the temporalities. . . .” 3 

The project, however, failed because of the determined 
opposition of the Archbishop of Canterbury and all the 
clergy. Under Henry V, in 1422, the same effort was 
made to confiscate all the lands of the Church. The King 
and Parliament seemed favorably disposed toward the 
plan; indeed, the value of the lands were already being com¬ 
puted when the impending war with France drove this 
project into the background, and no more was spoken of 
the seizure of these lands. 


1 Willard: op. cit., 207.—“All the evidence that has been collected on this 
subject bears , out the conclusion that there was regularly laid upon the 
clergy of England for their personal goods and lands acquired since the 
twentieth year of King Edward I the burden of the sharing with the 
laity the national taxes in Parliament.”—See also the subsidy granted in 5 
Henry VIII, c 17, which exempts lands already chargeable to clerical 
tenths, so that properties of the clergy be not subject to double taxation. 
—See also 6 Henry VIII, c 26; 37 Henry VIII, c 24. 

2 Stevens: op. cit., 148.—Cf. Dowell: op. cit., II, 32. 

3 Ibid., 138.—Tanner: op. cit., Preface VII. 

43 




Historical Origin of Tax Exemption 


Important The re *& n °f Henry VIII opens an era 
Changes During fraught with tremendous transformations, 
the Reign of social, economic and religious, which in 
Henry VIII turn brought a bout changes in fiscal policy 
that bear directly on the subject of this inquiry. Properly 
to appreciate the magnitude of these latter changes and the 
far-reaching consequences ensuing therefrom, it is neces¬ 
sary to restate briefly the facts regarding exemption from 
taxation of the charitable (religious) institutions before the 
middle of the sixteenth century. During the early Middle 
Ages the properties of the Church were on theological 
grounds generally exempt from the current mode of taxa¬ 
tion. However, it became customary for the Church, as one 
of the largest landowners, to make voluntary contributions 
to the royal fiscus. But the Norman Kings, beginning with 
Henry II, gradually subjected the Church property to regu¬ 
lar contributions and though the latter protested that its 
payments were voluntary and “by free grace,” the fact was 
that the English Kings were strong enough to compel the 
Church to pay taxes. It was as true of the fifteenth, as 
Mr. Willard says it was of the thirteenth and fourteenth 
centuries, that no distinction for fiscal purposes could be 
made between Church and lay property. 1 There was no 
distinction, as we have seen, between the movables of lay 
persons and those of the religious houses. Similarly there 
was no distinction in the taxation of land. It was not the 
capital value of the land that was taxed, but the revenue, 
the rent it bore. And since the religious houses owned 
large tracts of land which they rented out to tenants, and 
in a sense competed with lay persons, there could be no dis¬ 
tinction for taxing purposes between them. 

1 Willard: op. cit., 4 University of Colorado Studies, 207. 


44 




of Charitable Institutions 


III 

Widespread The ^ ate re ^§^ ous houses had escaped 
Confiscation of at the hands of the lawyerless Parliament 
Church Prop- of 1404 they suffered at the hands of 
erty Henry VIII. “Forasmoche,” says the 

Statute, 1 “as manifest synne, vicious carnall and abhomyn- 
able lyvyng is dayly usyd and comytted amonges the lytell 
and smale Abbeys, Pryoryes and Relygyous Houses of 
Monks, Chanons and Nonnes . . . whereby the Gou- 

vernours of suche Relygyous Houses . . . spoyle, de- 

stroye, consume and utterly wast, as well their Churches, 
Monasteryes, Pryoryes, principall Houses, Fermes, 

Granges, Lands, Tenements and Heredytaments, as the 
ornamentes of ther Churches and ther goodes and cattails, 
to the high dyspleasour of Almyghty God. ... In 
consideracon whereof the Kyngs most Royall Majestye, 
.” having knowledge that the “pmysses” be true, 
makes a plain declaration of the “pymsses” to the Lords 
“spuall and temporall as to other his lovyng subjects the 
Comons.” 

Whereupon they resolve “that yt ys and shalbe moche 
more to the pleasor of Almyghty God and for the honor 
of this his Realme that the possessons of suche spuall, Re¬ 
lygyous Houses,” that is, all other monasteries, priories, 
etc., not having revenues above the yearly value of 200 
shillings, be given to the King. These lesser monasteries 
numbered about 400. In 1539 the King, after reciting how 
the heads of “divse Monasteries, Abbothies, Priories, Non- 
ries, Colleges, Hospitals, Houses of Friers and other re¬ 
ligious and ecclesiastical houses . , . without con- 

straynte, coaction or compulsion of any manner of pson or 
psons . . . have granted . . . all . . . their Man¬ 
ners,” etc., in the twenty-seventh year of his reign, dissolved 
about 600 abbeys and received similar “voluntary” con- 


x 27 Henry VIII, c 28. 


45 




Historical Origin of Tax Exemption 


veyances of their properties. 1 Soon thereafter the King 
ordered the dissolution and confiscation of the lands of 
about ninety colleges, including those of the two universi¬ 
ties. On their petition the latter colleges were spared. 2 

Then were also dissolved about one hundred hospitals for 
the relief of the poor, the old, orphans, widows and maimed 
soldiers. About twenty-five hundred chantries and free 
chappels were also dissolved and confiscated on the ground 
that they were devoted to superstitious uses. Altogether 
over thirty-five hundred houses, great and small, were de¬ 
stroyed in this universal wreckage. 3 King Edward VI pur¬ 
sued the policy of his progenitor and also confiscated a 
great number of the remaining religious houses. 4 

A momentary respite from destruction they received at 
the hands of Queen Mary, who even restored some of them 
to their former station. But Queen Elizabeth nullified 
Mary’s efforts and dissolved nearly all the religious houses 
that had thus far escaped confiscation. 5 Thus, at a blow, 
as it were, the religious houses lost all their properties which 
they had enjoyed for over a thousand years. Similarly at 
one stroke the work of administering the charitable func¬ 
tion which for over a thousand years had been the undis¬ 
puted prerogative of the religious houses, was wrested from 
their hands and lodged in others. This was a change of 
far-reaching implications, as we shall see. 

Further Taxa- Though the properties of the religious 
tion of Spiritual houses were by repeated confiscations pro- 
Revenue gressively diminished they continued to pay 

from their residue the tenths to which clerical property was 
wont to be subject, in order to help relieve the King’s neces¬ 
sities. Particularly frequent were the subsidies granted 

1 31 Henry VIII, c 13.—“An Acte for dissolucon of Abbeys." 

2 Tanner: Notitia Monastica, Preface XXV. 

3 Stevens: Royal Treasury of England, 187. 

4 In the Act of 1545 the colleges of the Universities of Oxford and 
Cambridge were exempted from dissolution. 

5 Stevens: op. cit., 238, 258. 


46 




of Charitable Institutions 


during the reigns of Henry VIII and Elizabeth. Even 
under Mary, when on the whole clerical property was 
safeguarded with some solicitude, the religious houses 
granted their tenths in one case in consideration of the large 
benefits conferred upon them by the Queen. Furthermore, 
Henry VIII introduced a new tax on clerical revenues. He 
exacted the first fruits of all spiritual revenues—a tax which 
hitherto had been a fertile source of income to the Pope. 
Mary, to be sure, rejected the first grants of spiritual and 
ecclesiastical promotions, but Elizabeth promptly restored 
the tax. 

Under the Stuarts, when the burden of taxation was per¬ 
haps heavier than under the Tudors, clerical property was 
uniformly brought under contribution. Thus in the third 
year of King James I “the clergy granted him four subsi¬ 
dies, of four shillings, on the Pound each, to be paid by 
every Archbishop, Bischop, Dean, Archdeacon, Provost, 
Master of College, Prebendary . . . and every other 

person enjoying spiritual promotion, out of nine parts of 
their whole income.” 1 Under the commonwealth, with few 
exceptions, all property was taxed. Commencing with the 
Restoration period, we hear less of grants of fifteenths and 
tenths and land taxes; we begin to hear of tonnage and 
poundage, poll taxes, impositions on the beer, ale, and other 
liquors, letters, stamps, newspapers—the so-called taxes on 
knowledge—and numerous excises. In the nature of things 
many of these taxes could not reach the activities of chari¬ 
table institutions. 

One change in particular may be noted here. The cus¬ 
tom had been, it will be remembered, for the king to make 
known his necessities to the clericals, who would then meet 
in separate convocation and make the requisite grant. This 
practice continued up to the time of Henry VIII. In the 
subsidy of 14 and 15 Henry VIII (c 16) there was the 
condition that if the clerical grant were less than what the 


1 Stevens: op. cit, 265. 


47 




Historical Origin of Tax Exemption 


lay tax on their lands would bring, these clerical lands 
would be subject to the lay tax. From this time on the 
custom arose for Parliament to confirm the clerical grants, 
and unless Parliament did confirm them, they had no legal 
validity. 1 Even this remaining shadow of voluntariness at¬ 
tached to the separate grants of the clericals disappeared 
in 1664, when by a mere “verbal agreement” 2 the clerical 
convocations were discontinued, and the clergy were taxed 
with all other lay persons by simple Parliamentary grant. 3 

The Introduc- Another significant innovation of this pe- 
tion of Exemp- riod of flux and change is the sudden in- 
tion Clauses troduction into the subsidy acts of ex¬ 
emption clauses, limited at first to specified educational 
and charitable institutions, and later enlarged so as to em¬ 
brace charitable and benevolent, literary and scientific in¬ 
stitutions as a class. Not that there were no exemption 
provisions in the subsidy grants of the period preceding 
this; indeed, the contrary was the fact. Thus in Saxon 
times we find many writs of exemptions from certain taxes 
issued by the King to his favorites or those who claimed 
them by ancient custom. 4 Similarly, writs of exemption 
were issued out of the Exchequer to those whose lands had 
been wasted by the sea, by the enemy, or whose lands had 
deteriorated from any other cause. In the land tax or 
carucate of 1198, levied by Richard I, parish churches were 
exempt, 5 as were also the Hospitallers and Templars, fre¬ 
quently, from the clericals tenths granted by the Pope to the 
English King. 6 Again in 1232 in the clerical tax of a for- 

1 Maitland: Constitutional History, 513.—Cobbett: Parliamentary His¬ 
tory of England, IV, 310. 

2 Hallam: Constitutional History, III, 240, 241. 

8 Taswell-Langmead: English Constitutional History, 552 (note 1), 202, 
,/ —where is quoted the remark by Bishop Gibson that this change “formed 

the greatest alteration in the constitution ever made without an express 
law.” 

4 Vinogradoff: English Society in the Eleventh Century, 181. 

6 See page 31 supra.—Rot. Pari., II, 433b; Rot. Pari., IV, 385b. 

6 Stevens : op. cit., 85. 


48 




of Charitable Institutions 


tieth of their movables, hospitals, prebenderies and parish 
churches were exempt. 1 But these flow as little from a 
general policy of exempting institutions of a comprehensive 
class as did the purely capricious exemption by Henry I of 
a certain abbot from an aid he had imposed. 2 

The instances are numerous where now one person and 
then another obtains a writ of exemption from this or that 
tax. 3 Thus one religious house prays the King to confirm 
a papal bull exempting it from all taxes because of its pov¬ 
erty. 4 Again upon the request of many rectories that they 
be exempted from all taxes, some are given exemptions, 
others are refused. 5 Exemption from taxation having been 
accorded to the Brethren of St. Michaels by the King, they 
pray a writ from the Exchequer to that effect. 6 

There are also a few instances where the lands taxed to 
the tenths of the clergy are, together with the lands of 
Eton, Cambridge and Oxford, exempt from a subsidy de¬ 
manded of towns to fit out the King with archers. 7 In one 
case the lands of colleges, hospitals and religious houses 
are exempt from an aid to marry the King’s daughter and 
knight his eldest son. The reason for this express exemp¬ 
tion is not clear, since by the normal feudal custom, such 
institutions would not be subject to feudal aid. 


1 Carte: History of England, II, 44. 

2 Morgan: History of Parliamentary Taxation, 22. 

8 For example, see Stevens: op. cit., 106. Madox, in his History of the 
Exchequer, has many more instances. 

4 Rot. Pari., II, 86a. 

6 Rot. Pari., IV, 245a. 

6 Rot. Pari., I, 55b. 

7 Rot. Pari., V, 233a; Rot. Pari., VI, 421a, where land amortized to the 
Church and any other place “spuall” is exempt from a subsidy to supply 
archers. 


49 


/ 




Historical Origin of Tax Exemption 


However, toward the close of the medieval 
Growmg S Ten- he P er ^ oc ^ a tendency does appear to exempt 
dency to Ex- religious and educational institutions from 
empt Religious the Acts of Resumption. It has been men- 
and Educational ^-[ onec j earlier that one of the practices of 
the English Kings was to render void and 
“of none effecte” privileges, franchises and immunities for¬ 
merly granted by them. 1 In these so-called Acts of Re¬ 
sumption there is generally to be found a saving provision 
that the grants made to the colleges of Oxford, Cambridge, 
Eton, etc., to churches and numerous specified persons still 
remain in force, all Acts of Resumption notwithstanding. 2 
What is here done is plainly not the same thing as exempt¬ 
ing educational and religious institutions from a general 
levy. 

At any rate, whether we consider these saving clauses in 
the Acts of Resumption as precedents or not, the obtrusive 
fact is that beginning with Henry VIII’s reign we first find 
specifically enumerated the colleges of the Universities of 
Oxford and Cambridge and others as discharged from sub¬ 
sidies. Thus in the grant of two whole fifteenths and 
tenths, because of the hostile proceedings of the Kings of 
France and Scotland, after allowing deductions for poor 
towns, and other districts wasted by the sea, there appears 
the following clause: 

“Provided always that no lands nor tents nor other 
hereditaments or possessions . . . appropried or be¬ 

longing to any College or College Hall or Halls, or by what 
other name or names thei be called or named in any of the 
Universities of Oxonford or Cambridge or the college of 
our Blissed Lady of Eton or to the College of Our Blissed 
Lady of Wynchestr ... or any goods or cattails of 

1 Rot. Pari., IV, 13a, where grants of the lands of the confiscated 
priories are resumed; Rot. Pari., VI, 418a, where are repealed letters 
patent granting exemptions from the payment of tenths. See page 13 
supra. 

2 Rot. Pari., V, 217a; Rot. Pari., V, 220a; Rot. Pari., V, 577a; Rot. 
Pari., V, 514a; Rot. Pari., V, 382b, 518b, 574b. 

50 




of Charitable Institutions 


the said college ... be charged or chargeable to, of, 
for or with the said quinzyme or quinzymes fivetene or 
fivetenes or any of theim or with any parcel thereof.” 1 

Similarly, in the next year another subsidy of a fifteenth 
and a tenth was granted, and also a poll tax on all owning 
realty and personalty. The exemption clauses of the earlier 
statutes appear here also. 2 A slight expansion is discern¬ 
ible in the exemption clause of the subsidies granted to the 
King in the sixth and fourteenth years of his reign. 3 This 
process continues in the grants made to Edward VI. Under 
Mary the colleges of the Universities of Oxford and Cam¬ 
bridge are also exempted from all subsidies. 

Under Queen Elizabeth we find a definite enlargement 
of the exemption clause. In the first year of her reign an 
act was passed to restore to the Crown the fruits and tenths 
from ecclesiastical revenues which Queen Mary, her prede¬ 
cessor, had relinquished. After providing that all the 
grants, immunities and privileges granted to the Universi¬ 
ties of Oxford and Cambridge, to Eton and Winchester, 
be “as good and effectual in the Lawe to all Intentes, Con- 
strucons and Purposes, as thoughe this Acte had never bene 
made,” the statute declared as follows: 

“Provided also that this Acte or any Thing therein con- 
teyned shall not in anye wise extende to chardge anny Hos- 
pitall founded and used, and the Possessions thereof em¬ 
ployed to and for the Relief of poore People or anny Scoole 
or Scooles or the Possessions or Revenues of them or anny 
of them with the paiment of any Tenthes or First Fruits; 
Anything in this Acte before mentioned to the contrary in 
anny wise notwithstanding.” 4 In the subsidies granted to 
James I we find the same exemptions meted out to colleges 


1 3 Henry VIII, c 22. 

2 4 Henry VII, c 19. 

8 6 Henry VII, c 26—14 Henry VII, c 16. 

4 1 Elizabeth c 4.—This statute reenacts 26 Henry VII, c 3. Cf. Ill, 
Journal of the House of Commons 695, where at the petition of the 
Governor of St. Thomas’ Hospital an ordinance was sent to the Lords for 
the exemption of its rents from taxes and its ale from excise. 

51 




Historical Origin of Tax Exemption 


and institutions devoted to poor relief. 1 A further expan¬ 
sion in the number of the institutions exempted is found 
in the acts passed under Charles I and II. In the Act con¬ 
firming the subsidy granted by the Clergy of the Province 
of Canterbury, there were exempted the lands and revenues 
not only of the numerous colleges named, but also of “any 
Hospitalls, Almeshouses or Grammar Schooles or of any 
Church, Benefice.” 2 In the grant by the temporalty the 
same year, of two entire subsidies on personalty and realty, 
imposed on “every pson borne under the King’s obeisance, 
and every Corporation, Fraternities, Guild, Misterie 
Brotherhood, 3 and Commonaltie, corporate or not corpo¬ 
rate,” there was a proviso that the terms of this Act did 
not apply to a number of colleges enumerated, nor to the 
“goods or lands of any Comon free Grammar Schoole 
. . .”, or “to the goodes, lands of any Hospitall, Mai- 

sondieu or Spittlehouse ppared and used for the sustenta- 
cion and reliefe of poore people.” 4 In the subsidy granted 
in the sixteenth year of the King’s reign the usual exemption 
clause does not appear, but it is restored in subsequent 
legislation. Thus in the subsidy of 1661, which the Parlia¬ 
ment “freely and cheerfully” gave to the King, to be levied 
on all realty and personalty, and in the similar subsidy of 
1663 we find ^e following proviso: 

“Provided alsoe that this Act shall (not) extend to the 
Lands or Goods of any Colledge Hall or Hostell within 
the Universityes of Oxford and Cambridge ... or 
to the Goods or Lands of the Colledge of Winton, . . . 
Eaton ... or the Lands . . . or to the Reve¬ 
nues . . . assigned for the sustentacion ... of 

1 3 Jac. I, c 25; 21 Jac. I, c 33, 34. 

2 1 Car. I. c 5. 

8 Sir William Ashley, in his English Economic History, II, 134, has 
shown how the medieval craft guilds were organized on a religious and 
charitable basis, as well as on a trade basis. These two functions were 
distinguishable. To the subsidies granted by the religious houses guilds 
also contributed. And they suffered the same fate that overtook the 
religious houses in the general debacle of the sixteenth century. 

4 6 Car. I, c 6. 


52 




of Charitable Institutions 


the poore Knights founded in the . . . Colledge of 
Windsor ... by King Henry VIII . . . or to 
the Goods and Lands of any Common Free Grammar 
Schoole . . . or to the Goods and Lands of any Hos- 

pitall, Maisondieu or Spittle House prepared and used for 
the sustenacon of poor People.” 1 

Under the Cromwellian dictatorship it seems that all the 
lands customarily exempt were brought under contribution, 
for it was only at the humble solicitation of the Universi¬ 
ties and Colleges that these institutions were exempted. 2 

Under William of Orange and the Hanoverian Kings 
the exemptions from land taxes were retained. Thus, in 
this regard, 39 George III, c 5 reenacts the exemption pro¬ 
visions of 4 William and Mary, c 1, which are substantially 
those of earlier Acts. In the statutes of this period there 
appear two clauses which show conclusively that unless the 
property devoted to a religious or charitable use were spe¬ 
cifically exempted, it was subject to land tax. 

Thus in the Land Tax of 1707 there is the provision 
that all the lands of the hospitals assessed in the fourth year 
of William and Mary, 1692, be subject to this tax; again, 
if there should be any dispute to what extent the lands of 
any institution not specifically exempted should be taxed, 
this dispute be referred to Commissioners. The Act of 38 
Geo III, c 5 contains similar clauses. In the numerous Acts 
passed during the reign of Queen Victoria, such as the In¬ 
come Tax Act (1842), 3 4 the Inland Revenue Act (1885)) 
educational, charitable, literary and scientific institutions are 
expressly exempted. It must be borne in mind that prop¬ 
erty devoted to a public or charitable use is not exempted 


1 13 Car. II, Stat 2, c 3; 15 Car. II, c 9. 

2 Acts and Ordinances of the Interregnum, I, 570; 490, 274.—Lt. 
Dowell: History of Taxation and Taxes (1st ed.), II, 32. In earlier 
times the Church gave freely from a full purse in order to keep it. 
Under the Commonwealth the property of the Church was assessed in 
common with the property of the laity.” 

3 5 and 6 Viet., c 35. 

4 48 and 49 Viet., 51. 


53 




Historical Origin of Tax Exemption 


from rating for poor relief. 1 Thus property of the Uni¬ 
versity of Edinburgh, and property held by the London 
Missionary Society is subject to poor rates. 2 But by ex¬ 
press statute in 1883 places of worship were exempted from 
poor rates, 3 as were in 1843 the properties of societies ex¬ 
clusively devoted to science, literature or the fine arts. 4 


rp, rr £ r What was the cause of the injection into 
Charitable Ad- the 1 axation Acts of this clause exempting 
ministration educational and charitable institutions? It 
to°Sta^e 1UrC ^ lS that the m °ving cause of this 

phenomenon was the fact that beginning 
with the fifteenth century the State, in most cases the munici¬ 
palities, took over the function of administering charity, 5 
and that consequently it was thought that property devoted 
to a public use should be freed from the burden of taxation. 
This shift of charity administration from the hands of the 
ecclesiastics into the governmental hands requires detailed 
examination. 

A powerful force contributing to the break-down of the 
administration of charity by the religious houses is to be 
found in their internal decay and deterioration. For large 
groups of men to attempt to lead secluded and ascetic lives 
is, to say the least, unwholesome. Moreover, as recipients 
of large gifts of properties and revenues the religious houses 
by degrees became absorbed in the worldly task of manag- 


1 Mersey Docks v. Camerun, 11 H. L. C. 443. 

2 Greig v. University of Edinburgh, L R 1 HL Sc 348. Governor of 
St. Thomas’ Hospital v. Dratton, L R 7 HL 477.—Reg. v. Wilson, 12 
A & E 94.—Reg. v. Sterry, 12 A & E 84. 

3 3 & 4 Wm. IV, c30. 

4 6 & 7 Viet., c 36. 

'“Upon the fact, at any rate, that during the fifteenth century the 
relief of the poor was slowly and very gradually falling into lay hands, 
there can, I think, be no doubt; though the change was very gradual, 
because by far the greatest part of the relief given was still dispensed 
either by the clergy or by ecclesiastics.”—Chadwick: The Church, the 
State and the Poor, 74 —“This work was taken in hand by the State in 
Scandinavia at a very early period, in England at the time of the Reforma¬ 
tion, in France at the time of the Revolution, in Italy toward the end 
of the nineteenth century.”—Warner: American Charities, 8. 

54 




of Charitable Institutions 


ing their estates, to the neglect of the spiritual duty of minis¬ 
tering to the needy. Undoubtedly Henry VIII exaggerated 
the worldliness and unwholesomeness of the life in the re¬ 
ligious houses, but it is not to be denied that they had 
reached the lowest ebb of their usefulness when they were 
destroyed by the King. Moreover, a similar process of 
dissolution was being consummated on the continent. 

This failure on the part of the religious houses to take 
care of the poor and needy helped nourish the disease of 
pauperism and vagabondage which in the later Middle Ages 
was becoming a menace to the State. The dissolution of 
the religious houses only aggravated the evil; not only was 
the little shelter they supplied no longer at hand, but their 
inmates, many of whom were turned out friendless and 
penniless, swelled the ranks of the vagrants. 


But it must not be supposed that the pauper¬ 
ism of the later Middle Ages was caused 
in any appreciable measure by the delin¬ 
quency of the religious houses. 1 Far more 
powerful forces, economic in their nature, 
operated to bring about this phenomenon. 
The old feudal order was breaking down 
and the new commercial-industrial structure of society was 
beginning to form. 2 In any period of transition large 
groups of men are bound to be dislocated from their nat¬ 
ural ties. Until adjustment sets in, acute suffering is under¬ 
gone. And so, with the break-up of the old manor, large 
numbers of men migrated to the towns or wandered about 
the country. The blind policy of the English Kings in 
debasing the coinage, in flagrant defiance of all economic 


Pauperism of 
Middle Ages 
Due not to De¬ 
linquency of 
Church, but to 
Economic 
Reasons 


1 Ashley: Introduction to English Economic History, II, 305-376. 

2 “Competition was beginning to have freer play. Domestic industry, 
especially that of the weaving of cloth in the rural districts, was taking 
the place of the old guild system and causing dislocation of manufacture 
in many towns. Out of the wreck of the Medieval system the capitalist 
was arising.”—Johnson: The Disappearance of the Small Landozvner, 29. 

55 




Historical Origin of Tax Exemption 


common sense, raised prices inordinately and added to the 
degradation of the lower classes. 

Beginning with the end of the fourteenth century, and 
increasing in tempo during the fifteenth and sixteenth cen¬ 
turies, a process known as the Inclosures was operating 
throughout the country. A new class of farmers arose who 
rented large tracts of land in order to raise sheep to meet 
the great demands of the wool market. Outbid by these 
farmers, many poor tenants were evicted by their landlords, 
and because of their necessities became paupers and vaga¬ 
bonds. Nor could employment be found with the sheep 
raisers, because their industry required relatively few la¬ 
borers. Driven from their lands, which the sheep raisers 
inclosed with hedges, unable to find employment, large num¬ 
bers begged, wandered about or congregated in towns. 1 
So great were the evils flowing from the inclosure system 
that the government attempted to check it, but found itself 
unable to cope with an almost irresistible economic tendency. 

Governmental As earl y as ’349 the government recog- 
Attempts to do nized the need of mastering the menace of 
away with pauperism and vagabondage. But, charac- 

Pauperism teristically, it attempted to repress the 

manifestations rather than remove the causes of vagrancy. 
The first Statute of Laborers, in 1349, complains of a 
large number of “valiant” beggars and forbids the giving 
of alms or succor to any of them, so that they may be com¬ 
pelled to seek work. 2 In limiting its injunction against 
almsgiving to able-bodied men, the government tacitly recog¬ 
nizes the right of the disabled to relief, but does nothing 

1 See the remarks of Ashley: op. cit., II, 261, on this Agrarian Revo- 
tion in the change from tillage to pasturage of land. 

2 It must be borne in mind that this statute, in its endeavor to compel 
able-bodied men to work, was attempting to counteract the effects of the 
Black Death, which diminished by a third the labor supply and increased 
tremendously the rate of wages. It is, therefore, inaccurate to assert 
that this Statute “is the first step . . . toward the national control of 
poor relief,” as does Miss Leonard: Early History of English Poor Re¬ 
lief, 5 . 


56 




of Charitable Institutions 


for them on the assumption that existing agencies are suffi¬ 
cient for their needs. To avoid the operations of this 
statute the laborers simulated incapacity or illness or mi¬ 
grated to parts of the country where the statute was not 
strictly enforced. 1 

Ignoring the temper of the peasants displayed in the 
Revolt of Wat Tyler, an Act was passed in 1388 to repress 
vagabondage. This time the wanderings of all beggars and 
of all laborers were restricted. Recognizing, however, the 
right of the impotent to relief, the Act ordered them to 
remain where they were, or if they were not taken care of 
by the local authorities, they were permitted to wander to 
other towns more charitable. 

A further governmental intervention for the relief of the 
needy is to be found in the Act of 1392, which provided 
that where any religious institution appropriated the reve¬ 
nues of any parish church, a sufficient sum of money was to 
be set aside for the sustenance of the poor parishoners. 
No change is discernible in provisions of the subsequent 
statutes governing laborers and vagrants, except a soften¬ 
ing in the punishments meted out for transgressing them. 

In the sixteenth century vagrancy took on the formidable 
aspect of a national menace. “Whereas before the six¬ 
teenth century, beggars were only an occasional nuisance, 
they now became a chronic plague.” 2 The aggravated evil 
called forth more effective antidotes. “Where in all places,” 
says the Statute, 3 “Vacabundes and Beggers have of longe 
tyme increased and dayly do increase in exces- 

syve numbers by the occasyon of ydelness . . . whereby 
bathe insurged and spronge . . . contynuall theftes, 

murders and other haynous offenses and great enormytes. 
And whereas [in spite of previous laws] yet that notwyth- 
standyng the sayde nombres of vacabundes and beggers 

1 Rot. Pari., Ill, 312. 

2 Leonard: op. cit., 11. 

3 22 Henry VIII, c 12—“An Acte concnyng punysshement of Beggers 
and Vacabunds.” 


57 




Historical Origin of Tax Exemption 


. . . be not . . . mynysshed, but rather . 

augmentyd ... in greate routes and companyes,” it 
was provided that the justices be empowered to license poor, 
aged and impotent to beg within defined areas; unlicensed 
beggars were to be whipped and put into the stocks. 

We must notice the recession from the position of the 
earlier statutes. Begging was tolerated but controlled by 
the government. Shortly thereafter, in 1525, it was or¬ 
dered that all beggars return to their native towns, all 
towns should “moost charitably receyve” them and put 
sturdy and valiant beggars to work on pain of a penalty of 
20 shillings, so that the beggars be not “compelled to wan¬ 
der idelly and go openly in begging to aske almes;” that 
the officers of every town should cooperate with church war¬ 
dens in raising alms by voluntary contributions for the im¬ 
potent beggars; that the clergy should “exhorte, move, stirre 
and pvoke people to be liball,” etc.; that no other alms be 
given except as provided in this Act. The Act then care¬ 
fully pointed out that the contributions were not to be com¬ 
pulsory, but to be given by the parishioners “as ther free 
willes and charities shall extend.” 1 

In the subsequent legislation there is the same recogni¬ 
tion on the part of the State that the poor beggars must 
be sustained, but there is still the insistence that they be 
maintained by voluntary contribution. 2 The parishioners 
are to be “exhorted” to charity, but not coerced. But grad¬ 
ually the exhortation is reinforced by a threat of compul¬ 
sion. 

Thus in 1562 the parishioners, to be sure, were still “gen- 
telly” exhorted to contribute their alms, but if any one 
“will not so bee pswaded,” but “of frowarde minde shall 
refuse to gyve weekly to the relief of the poore according 
to his habilitees,” then he be committed to prison. 3 But in 


*27 Henry VII, c 25. 

2 3 & 4 Ed. VI, c 16; 2 & 3 P. & M., c 5. 

3 4 Eliz., c 5. 


58 




of Charitable Institutions 


the Poor Laws of 1597 and 1601 the parishioners are no 
longer to be exhorted, but the Overseers appointed by the 
Justices are to put to work all those who cannot maintain 
themselves; to raise by taxation a sufficient sum of money 
to buy flax, hemp, wool, thread, iron and other necessary 
materials to “sett the poore on worke,” and also to raise 
by taxation a sufficient sum of money “toward the necessary 
Reliefe of the lame, ympotente, old, blynde and such other 
among them beinge poore and not able to worke;” richer 
parishes are to be rated to help the poorer; refusal to pay 
the Poor Tax is to be followed by distress and sale of the 
offenders chattels and goods. 1 * * * 


.... . Thus from the parent legislation with re- 

Admimstration , ^ , 

of Charity in & ar d to conditions or labor and vagrancy, 

England be- there was developed the Elizabethan poor 

comes a Public law. Finding its attempts at repressing 

Function 1 A -r V a, c. ^ B 

vagabondage unavailing, the btate now 

adopted other means. It laid down the principle that the 
duty of each town or parish was to take care of its own 
destitute and impotent. It provided machinery whereby 
the charitable impulse of the parishioners was to be ex¬ 
ploited to the utmost. But the poor evidently made de¬ 
mands beyond the feeble strength of voluntary contribu¬ 
tions. The next step was to levy a tax on the parishioners 
for the maintenance of their poor. 

As in later Greek and Roman times, the administration 
of charity in England now became a public function out of 
sheer need to preserve the integrity of the citizenry. The 


1 39 Eliz., c 3; 43 Eliz., c 2.—These statutes were made perpetual after 

the Restoration. Apart from changes in administrative detail, the Eliza¬ 

bethan Poor Law remained the backbone of English poor relief up to the 
middle of the 19th century. At the beginning of the 14th century it was 
well established that church rates could be imposed on all parishioners to 

repair and maintain the parish church. By an Act of Parliament these 
church rates were merged with the poor rates in 1617. Just as each parish 

was bound to build and repair bridges, erect jails, reimburse persons 
robbed on the highway, etc., it was bound to maintain its churches and its 
poor.—Cannan: History of Local Rates, 102-131. 

59 




Historical Origin of Tax Exemption 


maintenance of the needy now became a fixed charge on the 
community. The funds necessary for the internal defense 
of the nation against pauperism were to be raised by pub¬ 
lic taxation just as much as the funds necessary for the 
external defense of the nation against a foreign enemy. 


mi t'v , • r Lending, as it were, religious sanction to 
Charity Empha- th e economic forces that were impelling the 
sized by the civic authorities to take over the adminis- 
Reformation tration of charity—a phenomenon that was 
manifesting itself on the continent no less than in Eng¬ 
land—was the doctrine of charity emphasized by the Refor¬ 
mation. It may not be doubted that the early Christian 
Church by its teachings fostered the practice of indiscrimi¬ 
nate almsgiving, which kept in sustenance an ever-increasing 
number of mendicants. The Reformation discountenanced 
this religious sanction for almsgiving, but emphasized 
rather the civic or social duty of poor relief. Says Chad¬ 
wick: 

“The Reformation had many . . . results, among 

these was that it revolutionized the conception of charity. 
The policy of the Reformers set very strongly against 
indiscriminate charity, which had become nothing less than 
a curse to society during the later Middle Ages. For in¬ 
stance, Luther laid down the two following principles: 
First, ‘Begging is to be rigidly prohibited; all who are not 
old or weak shall work. No beggars shall be permitted 
to stay who do not belong to the Parish/ On the second 
principle it seems as if he would relieve the Church entirely 
of its responsibility to the poor, for he says: ‘Each town 
shall provide for its own poor people . . . poor 

householders ought to be given loans from the public 
chest.’ Ml 

Indeed, following the example of the continent, it was 


1 The Church, the State and the Poor, 81.—It must be admitted that in 
the catholic countries also the towns were beginning to displace the 
Church as the agency of relief. 


60 




of Charitable Institutions 


the English municipalities, rather than the central govern¬ 
ment, that first lent the public machinery for poor relief; 
Parliament in many cases copied its relief measures from 
those of London and other municipalities. In English legal 
theory a municipality was practically a law unto itself; at 
a very early date the towns and cities adopted many pater¬ 
nalistic measures for the relief of their members, such as 
buying corn, food supplies, etc. Antedating Parliamentary 
legislation against vagrancy and for the relief of the poor, 
were many municipal ordinances directed to that end. 1 


Various Relief su PP^ ement the ameliorative operations 
Measures Sup- the poor law the government not only 
ported by the founded with public funds many hospitals 
Government anc | 0 th er charitable institutions, but lent 
solicitous aid to any private endeavor directed toward re¬ 
lief. To temper, perhaps, with an act of kindness his many 
acts of ruthlessness, Henry VIII founded numerous insti¬ 
tutions with the funds derived from the confiscated re¬ 
ligious houses, and at the earnest petition of many of his 
subjects spared others from the fate of the rest. 2 This 
policy, followed by Edward VI, received legislative sanc¬ 
tion by Elizabeth, who confirmed the royal foundations of 
Deans, Chapters and Colleges founded by her father. 3 
Numerous bills were introduced into Parliament for the 
erection of hospitals, workhouses, homes for old and dis¬ 
abled soldiers, etc. 4 Any surplusage from the poor rates 
was to be distributed to poor hospitals of the municipality 
and to such other charitable purposes as the justices deemed 
right; similarly the overseers of the poor were expected to 
build hospitals, workhouses, etc., by funds raised by 
taxation. 5 


1 Leonard, op. cit., 22-46, has an instructive chapter on this head. 

2 For the foundations of Henry VIII see Tanner: Notitia Monastica, 
Preface XXIV. 

3 35 Eliz., c 3. 

4 Leonard : op. cit., 75. 

6 39 Eliz., c 3. 


61 




Historical Origin of Tax Exemption 


In the Act to punish Rogues, Vagabonds and Beggars 
there is a provision that the Justices order the establishment 
of Houses of Correction. 1 To expedite the completion of 
the Royal Hospital founded by King William, 2 Parliament 
appropriated six thousand pounds per annum out of the 
duties on coal. 3 Further legislation was passed to facili¬ 
tate the collection of duties granted for the support of hos¬ 
pitals of royal foundation. 4 It would be tedious to enumer¬ 
ate the numerous measures adopted by Parliament and the 
municipalities for the erection and maintenance of charitable 
institutions; enough has been detailed to warrant the asser¬ 
tion that the government was acutely conscious of its duty 
to the poor and was employing active and extensive means 
for the discharge of this public duty. 


_ . One of these means was to lend legislative 

Receives Legis- ^ ei P l0r the creation and expansion of pn- 
lative Sanction, vate charity and benevolence. Thus Eliza- 
and Later Tax beth passed an act to facilitate the giving 
Exemption 0 f g*£ ts t0 hospitals. 5 Hitherto no chari¬ 
table institutions could be founded without express royal 
consent; now permission was given with some limitation to 
any one to erect hospitals, workhouses, etc., for the poor. 6 
The statute of charitable uses made provision for commis¬ 
sions to see that gifts for charitable uses would not be mis¬ 
applied. 7 We find in the Journal of the House of Com¬ 
mons petitions for the erection of churches, 8 bills to en¬ 
courage gifts to charitable uses, 9 and to preserve and con¬ 
firm grants to hospitals. 10 In one case a committee was ap- 


*39 Eliz., c 4. 

2 12 and 13 Guill. Ill, c 13. 

8 9 Ann., c 17. 

4 10 Ann., c 27. 

6 14 Eliz., c 14. 

6 39 Eliz., c 5. 

7 43 Eliz., c 4. 

8 XV, 298; XVI, 25; XVII, 180. 

9 XIII, 368. 

10 1, 588, 95. 


62 




of Charitable Institutions 


pointed to consider the question of the relief of maimed 
soldiers, widows and orphans. 1 

By the Charitable Trusts Acts (1853-1894) a board of 
commissioners was established, among other things “to 
sanction building leases . . . sales and exchanges of 

charity lands ... to frame new schemes for the bet¬ 
ter management of charities,” etc. 2 By way of response 
to this encouragement held out by the government, we find 
numerous institutions founded by private individuals. At 
first they are subsidized by the government; often they are 
under public control, either wholly or in part. 3 Soon public 
aid finds expression, not in open, direct bounty, but in the 
granting of the privilege of exemption from taxation. 

This seems to be the only explanation of the fact that, 
beginning with the Tudor period, there appears in the 
subsidy and taxation acts clauses of exemption for educa¬ 
tional and charitable institutions, Deans, Colleges, Chap¬ 
ters, Hospitals, Grammar Schools, Almhouses, Maison- 
dieu, Spittels, etc. Subsequent legislation added literary, 
scientific and fine arts societies to the list. In this policy, 
consistently followed and liberally applied, there seems to 
be general acquiescence; at least the books reveal no traces 
of any opposition. 

There are, to be sure, stray instances reported by Han¬ 
sard, in his Parliamentary Debates , where it is urged that 
an exemption is too sweeping, 4 but nowhere is there any 
challenge of the policy dictating such exemption. Nor is 
positive evidence wanting on that score. In the debates 
on the Bills for exempting Literary and Scientific Societies 
from local rates there was not even a ripple of dissent when 
one of the speakers said in support of the Bill: 

“It (this exemption) would in effect be equivalent to a 
vote by that House of so much public money. . . .” 5 

1 V, 368. 

2 Stephens: Commentaries on the Lazos of England (14th ed.), Ill, 113. 

3 Loch: Society and Social Reform, 334-340. 

4 Hansard: Parliamentary Debates, 3d Series, LXII, 1390. 

8 Ibid., LXX, 181. 


63 




Historical Origin of Tax Exemption 


Tax Exemption Manifestly, if the voting by Parliament of 
a Matter of public money for scientific and literary so- 

Expediency cieties were a revolutionary innovation, 

such a comparison between public subsidy and exemption 
from taxation would not have been made, or else would 
have called forth a torrent of protest. For Parliament to 
grant public moneys for such a purpose was evidently set¬ 
tled custom. And, frankly eschewing all attempts at his¬ 
torical justification for its course, the preamble to the 
statute bluntly reads: 

“Whereas it is expedient that societies established ex¬ 
clusively for purposes of science, literature, or the Fine 
Arts should be exempt. . . . m 

Thus the only reason for exempting these societies is 
that it is expedient to do so. 

Questions of expediency are generally determined, not by 
historical considerations, but by weighing ends sought im¬ 
mediately to be achieved. Historical justification is not an 
element dictating an expedient course of action. And yet, 
in the case at hand, there is ample historical justification 
for the expediency, which now impels the exemption of re¬ 
ligious, charitable, benevolent, educational and literary in¬ 
stitutions. The work performed by these institutions was, 
as we have seen, throughout the Middle Ages in the hands 
of the religious houses. These religious houses were very 
wealthy. Indeed, Parliament had to intervene to prevent 
their further enrichment. One petition to Parliament states 
that the Church owned one-third of the land of England. 
From these lands the Church drew an enormous revenue, 
rivalling that of the lay lords. To meet the mounting ex¬ 
penditures of King and Government, the revenues of these 
religious houses were brought under contribution. It was 
the very great wealth of the Church, put to productive use, 
and bringing substantial economic return, that made its 
properties a proper taxable subject. To have exempted 


*6 & 7 Viet, c 36. 


64 




of Charitable Institutions 


such vast properties would have meant royal fiscal poverty. 
The inexorable pressure of the economic need of taxing 
these properties overrode the claim of immunity, based, 
as it was, on theological grounds. 

But the dissolution of the religious houses and the con¬ 
fiscation of their lands and goods presented a radically 
altered state of facts. The properties formerly subject to 
taxation were now in the hands of the Crown or its favor¬ 
ites. At the same time the State began to devote public 
funds for charitable work. Manifestly property so used 
was not taxable, and the private foundations which de¬ 
veloped under the encouragement of the government were 
small, with no wealth other than that necessary to carry 
on their charitable work. Thus, when in the thirty-ninth 
year of Elizabeth, the people generally were given permis¬ 
sion to found hospitals or abiding-places for the poor or 
impotent, the limitation was that such houses have not a 
yearly income of more than 200 pounds. 1 It was true on 
the continent as in England, that the resuscitated charitable 
institutions had no large lands or income devoted to pro¬ 
ductive use. “And wherever the care of the poor was still 
in ecclesiastical hands, the only alteration in the way in 
which it was conducted arose from the fact that the Church 
had less abundant means at its disposal.” 2 Thus the very 
policy that dictated the taxation of the ample and eco¬ 
nomically productive property devoted to charitable uses 
in the Middle Ages dictated the exemption from taxation 
of the meager and economically unproductive properties 
devoted to charitable uses in the succeeding era. 

1 39 Eliz., c 5. „ ^ 

2 Emminghaus: Poor Relief in Different Parts of Europe, 13—Quoted 
in Warner: American Charities, 9. 


65 




Historical Origin of Tax Exemption 


IV 

It was no new order of things that the 
in S A^nerica 111 ^ 8 m ^g ra ^ n g Englishmen established in the 
Apply Princi- New World. The colonists were no less 
pies of English English in their traditions and outlook upon 
life for having crossed the ocean. At least 
in its social and political aspects, colonial life was a mere 
continuation of English life—a branch of the old tree 
planted in new soil. 

Founded, in the main, at a time when the English Poor 
Law, created by the Tudors, was being developed on its 
administrative side by the Stuarts, it is not surprising that 
the colonists put into prompt application the principles of 
English relief. Apart from local variations, all the colo¬ 
nies adopted the English doctrine that the care of the poor 
and the impotent was the abiding duty of the community. 
It is needless to attempt to show the development of poor 
relief in all the colonies; as illustrative of the general prac¬ 
tice it will be sufficient to detail the data with regard to 
the growth of the Poor Law in one or two states. 


A Few Exam From early colonial times the system of 
pies of the town relief for the poor and impotent was 
Growth of the established in Connecticut. In 1680, in 
Poor Law answer to a request of the Privy Council 
for a statement of the condition of the colony, the colonial 
government, among other things, reported; “For the poor, 
it is ordered that they be relieved by the towns where they 
live, every town providing for its own poor; and so for 
impotent persons.” 1 

Earlier instances are to be found where the town of 
Hartford appropriated twenty acres “for the accommoda¬ 
tion of several poor men that the town shall think meet to 
accommodate there.” 2 In 1645 the question arose whether 


1 Capen: Historical Development of the Poor Law of Connecticut, 
XXII Columbia University Studies, 22. 

2 Capen: Ibid., 23. 


66 




of Charitable Institutions 


“Sister Sampson should be provided for at the town’s 
charge, so far forth as her husband is not able to do it.” 1 
Such sporadic attempts on the part of the towns to relieve 
hardship now and then were soon enlarged into a uniform 
and fixed policy of relief by legislation in 1673 that “Every 
town within this colony shall maintain its own poor.” To 
avoid surcharging the wealthy towns to which the poor 
would be tempted to gravitate, and to obviate the possi¬ 
bility of one town’s caring for the poor of another, stringent 
laws of settlement were passed with regard to the admission 
of inhabitants and the entertainment of transients. Simi¬ 
larly, to lighten their burden of relief, the towns would 
often compel relatives to support the poor. 

Thus, complaint being made that one John Lord had 
“Withdrawn from his wife and left her destitute of a bed 
to lodge on, and very bare in apparel, to the endangering 
of her health,” authority was given “to require of the said 
John Lord the wearing apparel of his wife and also a bed 
for her to lodge on.” 2 Again with regard to the care of 
the insane and feeble-minded, each town, following the 
Massachusetts practice, was required to support them if 
their relatives would not. 3 The stringent legislation of the 
period regarding idleness, intemperance, support of one’s 
slaves, bastardy, etc., reveals the abiding care of the towns 
to reduce to a minimum the demands of the poor on the 
public revenues. 

The Sta^e At a very early time the state government 

Government began to aid the towns in their efforts of 
Aids Relief relief. In 1687 Governor Andros gave the 
Efforts overseers of the poor, with the consent of 

the Justices of the Peace, the power to levy a tax for the 
support of the poor, to be collected like any other tax. 
They were empowered also to set able-bodied persons to 


1 Capen : op. cit., 23. 

2 Ibid., 24. 

3 Ibid., 32. 


67 




Historical Origin of Tax Exemption 


work. Similarly by an act in 1702 the overseers were per¬ 
mitted to spend the public funds to sustain the poor, and 
by an act of 17 n the charge of caring for the sick was to be 
accounted to the treasurer of the town. 

During the next century no marked changes in the policy 
of relief occurred. The vagrancy and settlement laws were 
somewhat relaxed, the towns tried more effective means 
to compel relatives to care for their poor, to let the poor 
out on contract, to put the able-bodied to work, etc.; the 
State also cooperated more closely with the town and as¬ 
sumed part of the expense of relief. 


The Beginning Toward the end of the nineteenth century 
of Institutional the period of institutional relief com- 
Relief mences. Town workhouses had already 

been erected at public expense much earlier. In 1785 the 
assembly authorized Hartford “to build an almshouse in 
said town for the support of the poor . . . and at all 

times hereafter to appropriate the public monies of said 
town, and to levy and collect taxes for the purpose of 
erecting . . . and supporting the same as they [the 

inhabitants] shall judge expedient.” 1 During this period 
towns were given leave to erect other institutions; they 
were to bear the expense of maintaining the inmates. 

In 1826 the first public hospital was chartered; no pub¬ 
lic appropriations were made; it was supported by private 
contributions. The first hospital for the insane was estab¬ 
lished in 1824. The State was to supervise the institution, 
but no public funds were appropriated. There had been 
a good deal of legislation with regard to the care and in¬ 
struction of minors and apprentices, but it was not until the 
nineteenth century that institutional relief was accorded 
them. Children committed to such institutions at the ad¬ 
vice of town officials might be bound out to private fami- 


1 Capen: op. cit., 133. 


68 




of Charitable Institutions 


lies. There was public supervision, but no public subsidy 
for these institutions. 1 

But these few institutions were unable to cope with the 
spread of pauperism and sickness which the surveys of 
1851 and 1874 revealed. Pauperism was declared, by a 
Select Committee, to be a “subject of vast importance to 
this State, and one which your Committee are of opinion 
should have an entire new system adopted.” 2 The new 
system adopted was the creation of a State Board of Chari¬ 
ties and the erection of numerous institutions. In 1854 
the assembly made an annual appropriation of $2,000 to 
the General Hospital Society of Connecticut, a private in¬ 
stitution. To the newly established Hartford Hospital 
$10,000 was granted, on the condition that double this 
amount be paid by private individuals. Similar aid was 
given to other institutions. 3 

To care for the increasing number of insane a State 
hospital for these unfortunates was erected in 1866. To 
diminish the cost of maintaining idiots in a town of two 
thousand—the tax for idiot paupers was $750 a year—a 
commission of inquiry recommended the establishment of a 
school for idiots, to be privately conducted, but State sup¬ 
ported. They disadvised a State owned institution for fear 
that politics would ruin the enterprise. Blind, deaf and 
dumb inhabitants were maintained in existing institutions 
at the public expense. Soldiers’ Homes and Soldiers’ 
Orphans’ Homes also received public aid. In 1854 a State 
Reform School, and in 1868 an Industrial School for Girls, 
were erected and maintained at the joint expense of the 
State and private individuals. In addition public appropria¬ 
tions were made to some of the numerous private institu¬ 
tions which were developing at this time. 4 Summarizing 
the growth of the Connecticut Poor Law between 1838 


1 Capen : op. cit., 133-169. 

2 Ibid., 216. 

8 Ibid., 228. 

4 Ibid., 224-272. 


69 




Historical Origin of Tax Exemption 


and 1875, the so-called institutional period, Dr. Capen 
says: 

“The period under consideration was marked by two 
features pre-eminently, an increased use of institutions, and 
an enlargement of the functions of the State. 

“The institutional trend was seen not only in the erec¬ 
tion at State expense of the insane asylum and reform 
school, but also in the maintenance by the State of insti¬ 
tutions under private control, such as the industrial school 
for girls, the school for imbeciles, and the soldiers’ orphans’ 
home. It was manifested also in grants to hospitals . . . 
and in appropriations for the institutional care of the deaf 
and dumb and the blind. Besides, many charters were 
granted for private asylums and homes for children, in¬ 
ebriates and the sick. 


Increase in “Alongside of this was an increase in State 
State Activity activity. Just before the close of the last 
period the system was almost purely one of relief by towns. 
In 1875 the State had assumed somewhat greater responsi¬ 
bility for those without settlements in Connecticut and, 
more important yet, it had appointed a State commission 
with the power of authoritative supervision of all charitable, 
reformatory and penal institutions. This was an important 
step, for it showed a recognition by the State of its duty 
to see that dependents were properly cared for, whether 
by its own officials, by local authorities, or by private philan¬ 
thropists.” 1 


The Poor of 
New York 
Cared for by 
the Church 


In New York the development of events 
was not materially different, save, at the 
beginning, in one respect. Among the 
Dutch it was the Church and not the mu¬ 


nicipality that cared for the poor. 2 Replying to the peti- 


1 Capen : op. cit., 273. 

2 Petersen: New York as an Eighteenth Century Municipality, Part I, 
LXXV Columbia University Studies, 183. 

70 




of Charitable Institutions 


tion of one John Fossacre for help during illness, the mu¬ 
nicipal officers recommended to the “deacons of this City to 
allow the Petitioner some support.” 1 To settle the contro¬ 
versy as to which church the petitioner belonged, the Luth¬ 
eran or Reformed, the court ordered that “Each Church 
should for the future Maintaine their Owne Poore.” 2 It 
was perhaps the desire to relieve a further draft on church 
funds that induced the Dutch Trading Company to pro¬ 
pose to Peter Stuyvesant that the Jews be permitted to set¬ 
tle in the New Netherlands on condition that they main¬ 
tain their own poor, although they were forbidden to main¬ 
tain their own synagogues. 3 

Municipal Re- About two decades after New Netherlands 
lief Introduced became New York we find the English 
practice of municipal relief introduced. In 1685 the Com¬ 
mon Council ordered that the alderman make a survey of 
their wards for the poor and needy that “care may be forth¬ 
with taken for their Reliefe out of the publique Treasury 
of this Citty and this County.” 4 In 1691 overseers of the 
poor were appointed with power “to releave Such persons 
they Shall deeme Objects of Charity and to draw bills upon 
the Treasurer for . . . moneys.” 5 6 In 1695 these 

overseers were, together with the Common Council, em¬ 
powered to “raise all taxes for Defraying of ye Publick 
Charges of ye said Citty now Especially for Maintaining 
of the poor Repairing the High ways and all Publik Build¬ 
ings.” 0 

The poor were at first maintained at home or boarded 
with some family; the children were given out in appren¬ 
ticeship. The Minutes of the Common Council contain 
many curious entries of payments in money or kind made 

1 Petersen : op. cit., 183. 

2 Ibid., 184. 

3 Cobb: Rise of Religious Liberty in America, 316. 

4 Petersen : op. cit., 184. 

5 Ibid., 186. 

6 Ibid., 186. 


71 




Historical Origin of Tax Exemption 


by the municipality to dependents; for example, one Susan 
is supplied with “a good pair of Shoes and Stockings and 
Other Necessary Warm Clothing She being very old Poor 
and Non Compos mentis.” 1 But owing to the increase of 
dependents the project of building a poor house was under¬ 
taken by the Council in 1714, but its construction was not 
completed before 1736. This institution, located near the 
present City Hall section, was a human catch-all, housing 
unruly servants, disobedient slaves, beggars, rogues, vaga¬ 
bonds, trespassers and paupers. It was an almshouse, work- 
house and house of correction rolled into one. 

To relieve the sick the municipality at first paid the fees 
of the doctor ministering to the paupers, but soon in the 
interests of sanitation hospitals were built. Thus in 1758 
a building was erected to house persons afflicted with con¬ 
tagious diseases. In 1771 George III granted letters patent 
for the erection of a hospital. The legislature voted an 
appropriation of 800 pounds annually for twenty years, and 
the municipality offered a large plot of ground as a site for 
the hospital. This was the famous New York Hospital, 
built and maintained by the joint efforts of State, Munici¬ 
pality and private individuals. 

The Growth of From the facts detailed so far the marked 
Private similarity between the principles of the 

Philanthropy English Poor Law and those of the two 
representative colonies outlined above immediately leap to 
the eye. The outstanding feature in all three is the recogni¬ 
tion on the part of the governmental authorities of their 
public duty to maintain the poor, the sick, the crippled, the 
demented, the blind, the deaf, dumb, the orphans and 
minors. To maintain the needy and important is as much 
a public duty as to maintain ports, repair highways, erect 
prisons and other public buildings. 

But the municipalities found themselves unable to cope 


1 Petersen: op. cit M 191. 


72 




of Charitable Institutions 


with the task, 1 and private philanthropy stepped in to do 
the necessary work. Then the spread of the laissez faire 
doctrine and its permeation of American thought lent the 
color of philosophic sanction to a process that was inevitably 
setting in because of the imperfection of the governmental 
machinery in administering so delicate a task as relief. Pri¬ 
vate relief was deemed more efficacious than governmental. 
For example, the Connecticut Commission of Inquiry recom¬ 
mended in 1856 the establishment of a privately controlled 
home for idiots, rather than one controlled by the govern¬ 
ment. Nor were the State authorities averse to the growth 
of private institutions, for on every occasion they added 
incentive to private bounty by offering a modicum of State 
aid on condition of large private endowments. 

Process of Tax ^ ut ^ ns0 ^ ar as th e State permitted private 
Exemption was institutions to take over the work of charity, 
a Gradual the latter were pro tanto relieving the State 

Development 0 £ a b ur den which it had avowedly under¬ 
taken to bear. Private institutions were thus performing 
a public function. The quid pro quo which the private insti¬ 
tutions received was immunity from taxation. But it must 
be observed that what is done here is to state the terms of a 
bargain which we have not before us. It is not to be sup¬ 
posed that the bargain was openly made and publicly de¬ 
clared. There is no direct evidence that such a bargain was 
ever made. The process of exempting these private insti¬ 
tutions developed imperceptibly, subtly. It was a spontane¬ 
ous process, leaving no trace of its origin or immediate de¬ 
velopment. 

The task of the historian is to interpret facts, tendencies, 

1 “From the above review, it must be apparent that the administration 
of the work connected with relieving the poor lacked centralization, en¬ 
trusted, as it was, to keepers, wardens, vestrymen and aldermen. With 
the responsibility thus divided, it is little wonder that peculation existed. 
The larger part of the charitable work in the city was always supported 
by private individuals, societies and churches, without any connection with 
civil relief.”—Edwards: New York as an Eighteenth Century Municipality, 
Part II, LXXV Columbia University Studies, 100. 

73 




Historical Origin of Tax Exemption 


acts of individuals; to read the thoughts of the men who 
shaped the process he is studying. What interpretation can 
we give to this change from institutions owned and operated 
by the State to those owned by private individuals and sub¬ 
sidized by State, and finally to institutions supported by 
private bounty exclusively, when, coeval with this develop¬ 
ment, there appear in statutes and constitutions clauses ex¬ 
empting the latter properties from taxation? Plainly, the 
unescapable inference is that the immunity was granted for 
services rendered to the public. 

Taxation and Religious institutions fall within a different 
the Church category. Although the United States 
stands today preeminently for religious liberty and the com¬ 
plete severance of Church and State, such was not always 
the fact Indeed, up to the period of the Revolution the 
Church was an integral part of the State, and the clergy 
were a favored class in the community. 

In Virginia and the Carolinas the charter provided for 
the establishment of the Church of England, and like the 
latter it was maintained by compulsory tithes, assessed after 
the fashion of the English Church rates. The erection of 
a church was made mandatory. Ministers were supported 
by assessing every man a certain amount per head. Re¬ 
calling the old Hebrew practices, the Virginia legislature 
enacted in 1632 that there be given to the minister “the 20th 
calfe, the 20th Kidd of goats and the 20th Pigg.” 1 South 
Carolina in 1715 imposed a poll tax of five shillings in 
support of the ministry. 

In the New England colonies the Congregational Church 
was established by the legislature as the center of a theo¬ 
cratic state. At a very early date it was decided that the 
ministers be supported “at the publicke expense,” and in 
1638 it was enacted that “all inhabitants are lyable to assess- 


x Cobb: Rise of Religious Liberty in America, 81. 




of Charitable Institutions 


ment for Church, as for State.” 1 These compulsory church 
rates, enforced by distraint, remained the law of Massa¬ 
chusetts as late as 1833. “Ministers of the Gospel,” says 
Cotton Mather, “would have a poor time of it, if they must 
rely on the free contributions of the people for maintenance. 
The laws of the province are the King’s laws, the minister 
is the King’s minister, the salary is raised in the King’s name, 
and is the King’s allowance unto him.” 2 Even in Connecti¬ 
cut where, owing to the inspiration of Thomas Hooker, a 
humane spirit of toleration was exercised, the ministers and 
church w T ere supported by a public tax collected by the con¬ 
stable. In New r Hampshire the parishioners at first refused 
to pay Church rates on the ground that they were given 
liberty of conscience. But a law was soon passed which 
made refusal to pay punishable by imprisonment. 

The Dutch made provision for the maintenance of the 
Church and ministry, as well as for the teaching of religion. 
In the Articles of Colonization drawn by the Dutch West 
India Company there is the following provision: 

“8. Each householder and inhabitant shall bear such tax 
and public charge as shall hereafter be considered proper 
for the maintenance of clergymen, comforters to the sick, 
etc.” 3 

When New Netherland was surrendered to the English 
the Duke of York ordered that each parish build a church, 
that the cost of its erection and maintenance, together with 
the support of the minister, be met by public taxation, and 
that “every inhabitant shall contribute to all charges, both 
in Church and State.” 4 

1 Cobb: op. cit., 169. 

3 Baird: Religion in America, 244. 

3 Cobb: op. cit., 303. 

4 Ibid., 326. 


75 




Historical Origin of Tax Exemption 


Thus there was completely resuscitated in 
Uphold the StS t ^ le c °l° n i es of the New World, with per- 
Doctrine of the haps one or two exceptions, like Pennsyl- 
Unity of Church yania or Rhode Island, the Old World doc- 
and State trine of the unity of Church and State. 

Even in cases where dissenting churches were established, 
taxes were still levied on all parishoners, but were distributed 
pro rata to these churches. This was effected in Connecti¬ 
cut in 1727 by an “Act for the Ease of such as soberly Dis¬ 
sent,” and in Massachusetts by the Five Mile Act in the 
same year. 1 In this fashion the dissenting churches were 
incorporated in the Established Church. Where such unity 
of Church and State existed there could of course be no ques¬ 
tion of taxing the former. The Church, like any other 
public agency, would be exempt. Manifestly, if the towns 
“raised taxes for supporting and maintaining houses of pub¬ 
lic worship, those places of worship were exempt from 
taxation as public property by the nature of things.” 2 


_ , . But during the period of the Revolution the 

The Revolution . .. . 

Brings about Unurch in ail the colonies was disestab- 

Severance of lished. There was complete severance be- 

Church and tween the two. The Federal Constitution 
State 

expressly declares that “Congress shall 
make no law respecting an establishment of religion, or pro¬ 
hibiting the free exercise thereof.” In 1777 the New York 
State convention abrogated all laws that might be con¬ 
strued to maintain any particular denomination. In varying 
language all the States established the same principles of 


^obb: op. cit., 270, 234.—Zollmann: American Civil Church Law, 
LXXVII Columbia University Studies, 239.—“When dissenting churches 
began to grow up alongside of the Established Church, their essential 
private character was not at first recognized. Not only were they not 
taxed, but they actually . . . were made the recipients of money raised 
by taxation. . . . Arrangements were made by which this money was 

turned over to these dissenting churches. ... In course of time this 
arrangement was relaxed to such an extent that the taxes were allowed 
to be paid to the dissenting church body direct.” 

2 Franklin Street Society v. Manchester, 60 N H 342, 349. 

76 




of Charitable Institutions 


religious liberty, that no legislature can establish a religion 
or church or compel any person to attend any religious ser¬ 
vice or to contribute to the support of any church. 

There was thus cut away all historical ground for the 
exemption from taxation of religious institutions. But the 
old practice still continued, though the reason for it had 
vanished. This was because the practice was “so entirely 
in accord with the public sentiment that it universally pre¬ 
vailed.” 1 But here we enter upon the domain of policy 
which an historical inquiry must avoid. 2 

Educational In- ^ ne hiding cares of the settlers was 

stitutions Re- that learning should not be “buried in the 
ceive Govern- grave.” The support of the school and the 
menta Aid schoolmaster, like the support of the church 
and the minister, formed one of the earliest items of public 
expense. Indeed, the early schools were essentially ecclesi¬ 
astical establishments, and shared all the immunities of the 
Church. There was, however, no dearth of private aid to 
sustain the public schools erected by the colonists. Nor was 
there any lack of private schools receiving aid from the 
colonial governments. “Almost without exception the col¬ 
onial governments . . . made provision for education 

by granting privileges and charters to private schools, or by 
establishing schools and colleges by legislative enactment, to 
be supported in part by taxation.” “For a long time, how¬ 
ever, the chief work of the assembly (of Pennsylvania) was 
to create and not support the schools; for they were main¬ 
tained both by the church and private enterprise.” 3 

In New York, after a futile attempt in 1702 to establish 
a free grammar school, there was established in 1732, under 

1 State v. Jersey City, 24 N J L 108, 120. 

2 It must be observed that apart from a little flurry of agitation occurring 
in Tennessee and Kentucky and a few other States of the South over fifty 
years ago, evidenced by a flood of cheap and controversial pamphlets, 
attacking the exemption of the Church, there seems to be general acqui¬ 
escence in the policy of exemption. 

‘Blackmar: Federal and State Aid to Higher Education. 21, 22. 

77 




Historical Origin of Tax Exemption 


the public authority, a school for teaching Latin, Greek and 
mathematics. But it was not until 1746 that a college was 
founded in part at the public expense. The legislature pro¬ 
vided for the raising of 2,250 pounds for education, and 
when a charter was obtained from King George II, in 1754, 
King’s College was founded, now called Columbia College. 1 
Towards its foundation and maintenance Trinity Church 
granted a large tract of land; the State granted some land 
and money; King George gave 400 pounds; there were many 
gifts of private individuals. 2 


In similar fashion, by union of public and 
The Founding . . * u a n u 

of Colleges and P nvate agencies, Harvard College was 

Their Exemp- founded. In 1636 the General Court of 
tion from Massachusetts, “agreed to give four hun- 

Taxation dred pounds towards a school or college.” 

Other grants were made and an annual tax was levied for 
the support of the college which was now being erected. 
Private gifts followed close upon the establishment of the 
institution. In 1638 John Harvard donated his library and 
half of his estate. There were numerous donations of 
“horses,” “a silver bowl,” “one silver sugar spoon,” etc. 3 

The founding of Yale originated in peculiar circum¬ 
stances. Ten ministers cooperated to make contributions 
from their libraries for the foundation of a college. Other 
donations were soon added. Then an act was passed in 
1700 “for founding and suitably endowing ... a col¬ 
legiate school.” The college was endowed by the govern¬ 
ment with an annual grant of 120 pounds. During a dis¬ 
tressful period of the institution Elihu Yale made a donation 
of 400 pounds. After the question of the site of the college 
had been determined, both New Haven and the Legislature 


1 Sherwood: University of the State of New York, 45-47. 

2 Blackmar: op. cit., 133. 

8 Ibid., 57. 


78 




of Charitable Institutions 


made handsome grants to the college to supplement the 
numerous private donations. 1 

Of course, where the creation of the colleges was essen¬ 
tially a governmental enterprise, as it was in the United 
States, there could be no question of taxing educational prop¬ 
erties. “One of the earliest methods of favoring colleges 
was the exemption of college property from taxation, which 
to all intents and purposes is equivalent to granting special 
appropriations in the several cases equal to the amount of 
taxes on property of equal value. The custom was almost 
universal among the colonies, and even extended so far as to 
exempt, in several instances, the property of the members of 
the college or university.’’ 2 

1 Blackmar: op. cit., 105-107. 

2 Ibid., 25. 


79 




Historical Origin of Tax Exemption 


V 

Conclusions From the foregoing account the following 
conclusions emerge: 

1. There is ample historical justification for the exemp¬ 
tion from taxation of charitable institutions which perform 
without compensation a function which the State has, from 
Tudor times in England and colonial times in this country, 
avowedly undertaken to perform, viz., the care of the poor, 
sick, demented, crippled, blind, deaf, impotent, the helpless 
aged and young. 

2. As a corollary to the first proposition, there is no his¬ 
torical basis for the exemption of benevolent institutions, 
like the Y. M. C. A., or of fraternal organizations, like the 
Odd Fellows, to the extent to which they perform no func¬ 
tion which the State has ever undertaken to perform. 

3. As the State progressively takes on social duties by 
way of workmen compensation laws, health insurance, and 
social insurance generally, there is a corresponding weak¬ 
ening of the historical sanction for the exemption of chari¬ 
table institutions. 

4. Although there was sufficient ground for the exemp¬ 
tion of places of religious worship in colonial times, such 
ground, because of the disestablishment of the Church dur¬ 
ing the Revolution, now no longer exists. 

5. There is sufficient historical sanction for the exemp¬ 
tion of educational institutions, but not for parochial or 
religious schools. 

6. Where an institution justly entitled to exemption, be¬ 
cause of its charitable function, engages in other activities, 
such as renting its premises for profit, its claim for exemp¬ 
tion not only ceases, but there is direct historical precedent 
for taxing such an institution. 

7. When a charitable institution derives income from 
fees of its inmates, there seems to be no historical basis for 
exempting it from taxation. To prevent vagabondage and 


80 



of Charitable Institutions 


begging the state undertook to maintain only the poor and 
impotent, the utterly helpless. Those in a position to pay 
have, therefore, no claim on state support. In housing such 
inmates an institution is in no way relieving the state of a 
burden which the latter has ever undertaken to bear. 


81 



Historical Origin of Tax Exemption 


APPENDIX I 

A Recent De R eca Ui n g the pre-Tudor practice of taxing 
cision of the the Church when it was not only a religious 
Court of and charitable institution, but was a wealthy 

Appeals landlord receiving substantial pecuniary re¬ 

turns from its properties put to economically productive use, 
is a very recent decision of the New York Court of Ap¬ 
peals in People ex Rel Mizpah Lodge vs. Burke. 1 A branch 
of the order of Odd Fellows claimed exemption of its prop¬ 
erty under Section 4, Subdivision 7, of the Tax Law exempt¬ 
ing the property of charitable, religious, benevolent and 
fraternal organizations. The premises of the order were 
used for its own meetings, but were also regularly leased to 
tenants—other fraternal bodies—for their meetings. On 
the ground that the order received rents, income and profits 
from its practice of leasing its premises, in other words, 
that it engaged in the business, even incidentally, of a land¬ 
lord, the court denied the claim for exemption. 

“The controlling fact,” says the Court, “is the receipt of 
rents, profits and income.” 

1 228 N. Y. 245. 


82 




of Charitable Institutions 


APPENDIX II 

Com arison of v * c * ss * tu d es °f French religious and 

French and charitable institutions may be instructively 
English Chari- compared with those of the English already 
table Institu- detailed. 

To prevent the bulk of the wealth of the 
nation from stagnating in the hands of the religious asso¬ 
ciations, the French Kings, like the English, passed re¬ 
strictive mortmain acts. But despite this hampering legis¬ 
lation the Church was able to acquire, up to the French 
Revolution, about a third of the land of France. All this 
property, as we have seen, was exempt from taxation in 
accordance with the Constantinian doctrines embodied in 
French fiscal policy. 1 The Church, however, was never lax 
in helping the State out of difficulties by munificent gifts. 2 

The French Revolution dealt a death blow to the re¬ 
ligious and charitable associations in France, as did the 
Tudor Kings in England. By the laws of November 4, 
1789, and August 18, 1792, nearly all the religious asso¬ 
ciations were suppressed, their properties confiscated and 
put into circulation. From the taxes imposed by the revolu¬ 
tionary governments, based on the law of 1790, the remain¬ 
ing churches and lycees seem to have been exempted. 3 

After the Revolution, however, owing to the indulgence 
of the restored Bourbons, many of the religious establish¬ 
ments were reconstituted., A survey of 1849 showed them 
to be valued at forty-three million francs. Accordingly, 
there was imposed, in the same year, an annual tax on the 
“immeubles” of all seminaries, religious associations and 
charitable establishments. But the property held in main- 
morte still kept increasing until in 1880 it reached the value 
of five hundred million francs. Alarmed at this vast segre¬ 
gation of property, diverted from the channels of trade, 


1 Supra., p. 17. 

2 Supra., p. 18. 

* La Grande Encyclopedic. XII, 425. 




Historical Origin of Tax Exemption 


the government in furtherance of its fiscal Kulturkampf 
against these associations passed an act in 1880, amplified 
in 1884, subjecting them to heavy taxation—a percentage 
of their revenues to be computed on the basis of 5 per cent 
of all their properties, real and personal, and a percentage 
of all property acquired by inheritance or by gifts inter vivos 
from any of their members. 1 The class of associations 
subjected to this tax was delimited as follows: (1) “all 
the congregations, communities and religious associations 
. and all the societies or associations whose object 
is not to distribute their products, in whole or in part, 
among their members;” (2) “all the societies or civil as¬ 
sociations which allow the addition of new members, [and 
which permit] the increase in property by virtue of clauses 
of reversion to go to the profit of the remaining members.” 2 

Plainly the language is broad enough to include associa¬ 
tions of any description (save business organizations), such 
as scientific, literary or art societies, mutual aid societies, 
orphanages, hospitals, even the Institute of France. But 
all these societies were not subject to this Act, which was 
aimed only at the religious associations, and even against 
them the law w T as largely a dead letter. 

Further legislation—the so-called Association Laws of 
1901—was enacted against the Church in its educational 
and charitable activities which culminated in the law of 1905 
which superseded Napoleon’s Concordat of 1801 and sepa¬ 
rated Church and State. All places of public worship were 
taken over by the State and later released to religious asso¬ 
ciations for worship. There was, of course, reserved no 
payment for rent. When the State took over the legal 
ownership of these properties, theoretically at least, all 
question of taxing them naturally disappeared, for no state 
taxes its own properties. 

1 La Grande Encyclopedie, XII, 426. 

3 Law of 1884 quoted in Parmentier: Les impots sur les congregations 
religieuses, Journal des Economistes (Mars, 1891), 341.—Associations 
which did not fit the second description were still subject to the tax on 
revenues. 


84 




TENTATIVE DEDUCTIONS FROM THE FORE- 
GOING STUDY DRAWN BY COMMITTEE ON * 
TAXATION OF THE WESTCHESTER 
COUNTY CHAMBER OF COMMERCE 

In a state of society where Church and State are sepa¬ 
rate, charity and education take on different form. To heal 
the sick, care for the poor, succor the weak and educate the 
young becomes part of the duty of the State. What was the 
Church’s task now becomes the State’s. But until the State 
clearly accepts the burden private individuals must meet it. 
Even before there were rich endowments, individuals began 
to perform their social duties. To the extent that these indi¬ 
viduals and the institutions they established performed such 
functions, they were doing a public service. They were 
doing something which the State itself would ultimately 
have to do if it was to save itself and to grow. 

As much a part of self-protection as war, education and 
care for the weak is today a well-recognized part of the 
State’s duty to its citizens. It is, of course, obvious that the 
State should not tax its own agencies. To tax its own agen¬ 
cies would be to tax itself. It would simply take money out 
of one pocket to put it in another. It would weaken the 
institutions it created. By common recognition of the facts, 
therefore, the agencies performing these public services, 
though left under the control and management of private 
individuals, were accepted in qualified measure as State 
agencies. It was recognized that they were performing a 
task which the State itself should perform. The exemption 
from taxation which the State granted to them, therefore, 
was a partial contribution by the State. It was more in the 
nature of a subsidy—to encourage and strengthen them in 
their work. In short, the State encouraged private philan¬ 
thropy by subsidizing it. Instead of taxing these institu¬ 
tions and then giving them direct bounties, it relieved them 
from taxation. As was said in Parliament at an early date: 


85 


Historical Origin of Tax Exemption 


“It (this exemption) would in effect be equivalent to a vote 
by that House of so much public money. . . . m 

This we believe to be a defensible position. Until the 
State removes from all private hands the performance of 
the duty of education and care of the weak, the State must 
recognize that these private institutions are in fact agencies 
of the State and entitled to State aid. 

But something has happened in the divisional function¬ 
ing of the State which produces an inequitable application 
of this principle. Under our form of government, each 
State has a separate form of government, each treats its 
own tax problem separately, and each treats its own educa¬ 
tional problem separately. Moreover, our principle of local 
self-government gives us a separate tax unit for each city, 
village, county, township and school district. In the evolu¬ 
tion of these several units, w r e have lost sight of the original 
purpose of tax exemption and up to the present time have 
failed to analyze the practical results. Thus it comes about 
that a tax exempt institution may occupy so much of a whole 
township as to make it impossible for that township to col¬ 
lect taxes for its own support. And the tax exempt insti¬ 
tution in all likelihood is likely to be of no immediate or 
direct benefit to the township. It serves the entire State. 
It does something of value to all the people of the State. 
But the poor little township bears more than its share. 
Instead of supporting only its own poor, it is supporting 
a substantial part of the poor of the whole State. 

So a county may become, solely because of its fortunate 
physical location, the natural site for all the sanitaria, 
schools, colleges and like institutions of a substantial part of 
the State, and under our present sytem of tax exemption 
the balance of the property in the county carry the entire 
tax burden of county, city and town administration, includ¬ 
ing police service for the protection of these very institu¬ 
tions. A school district may not find sufficient taxable prop- 

mansard: Parliamentary Debates, 3rd Series, LXII. 1390. 

86 




of Charitable Institutions 


erty to support its school because a substantial part of its 
taxable lands is given over to institutions performing a State 
service. Suppose the State should pick out Westchester 
County (as it has, in substantial measure, done already) 
for all of its penal, educational and hospital institutions. 
These would, of course, be tax exempt. If 75 per cent, of 
Westchester were so taken up, the whole burden of county 
administration would fall upon the remaining 25 per cent, 
of the real estate. Would this be fair to Westchester? 
What is true of Westchester is true of other counties in 
the State. 

So, also, suppose a county institution is located in a sub¬ 
stantial part of one township. Would exempting all this 
property from town taxation be a fair application of the 
principle? 

In short, if tax exemptions are in the nature of subsidies 
for performing a State function, why should the counties 
suffer because they happen to be situated where these insti¬ 
tutions find convenient and accessible locations, and why 
should townships suffer because a county function is per¬ 
formed within its township? 

Again, if the subsidy in the way of exemption is granted 
because of the performance of a service in aid of the State, 
why should cemeteries (operated as a business) be exempt? 
Why should private sanitaria or private insane asylums be 
exempt? Why should institutions be permitted to sell their 
holdings at a profit after long years of State subsidies and 
go scot free of tax? Why should an entire institution or¬ 
ganized on a paying basis be exempt because a small part is 
furnishing free service? 

Obviously, we must develop some more equitable method 
for allowing exemptions. Our present New York law is a 
hodge podge of exemptions, which, by the simple process of 
applying analogies to analogies, has added exemption to 
exemption, with no basic or guiding principle. 

If tax exemptions are to be based on sound principle, 


87 



Historical Origin of Tax Exemption of Charitable Institutions 


what sounder principle is there than that disclosed in this 
historical study? Let the State aid all those agencies which 
are performing a State function, leaving the counties, the 
cities, the villages, the townships and school districts free to 
tax all property save those that are performing for them 
local functions. Cut out all exemptions that are inconsistent 
with this principle. 

As for exemption of church property, this concededly 
presents a problem. But it will doubtless interest church¬ 
men as well as laymen to learn that church property has 
not always been exempt from taxation and that upon many 
occasions it was the policy of the Church to pay its share 
toward the expense of government. 

Now that Church is separated from State and each re¬ 
ligious group supports its own institutions, it may well be 
that churchmen themselves will call for a change in the law. 

We ask these questions in no antagonistic spirit. We ask 
merely for light. We are as yet propagandists for no 
program. 

Committee on Taxation 

William R. Bull, Chairman 
Henry R. Barrett 
Julius Henry Cohen 
Frederick P. Close 
Benjamin L. Fairchild 
Laurence A. Tanzer 

January, 1922 


88 



PART II 


STATISTICAL 


DETAILS OF EXEMPTION 
IN WESTCHESTER COUNTY 

AND 

IN ENTIRE STATE 
OF 

NEW YORK 















* 


























INTRODUCTION TO PART II 


This data regarding exemptions of real estate has been 
collected to show the proportion of property which is ex¬ 
empt from taxation, and how the total exemptions are dis¬ 
tributed among various classes, and also how the exemp¬ 
tions have increased in volume from year to year. 

This classification is interesting and useful in connection 
with the study in Part I. While particular attention is given 
to Westchester County, this book is intended for State-wide 
distribution and to secure suggestions that may help to im¬ 
prove the situation generally. We hope, therefore, that the 
figures, while possibly showing a condition in Westchester 
worse than may exist in some other counties, may be of 
assistance in other localities in analyzing their respective 
situations. 

Table I shows the total exemptions in four of the larger counties 
in 1907 and 1920 and the increase in thirteen years. 

Table II shows the division of properties exempt from taxation 
in Westchester County in the years 1907 and 1919 as nearly as they 
can be subdivided. 

Table III shows the value of real property in the State of New 
York exempt from taxation for the years 1910 to 1920 by counties. 

Table IV shows the assessed valuation of the entire State from 
1906 to 1920 together with exempt property and percentages. It 
also shows the yearly increase of exemptions in the State and in 
Westchester County. 

Table V shows the total amount of exempt property in each 
township and city in Westchester County in 1912 and 1920. 

Table VI shows the assessed valuation of the privately owned 
and the publicly owned properties in the various townships and 
cities in Westchester County in 1920. 

Table VII shows for 1907 by townships and cities exempt prop¬ 
erty classified as to privately owned and publicly owned properties 
and the percentages in each case of the total exemptions. 

Table VIII shows the same compilation for 1919 to be used in 
connection with Table VII. 

Table IX shows the amounts of privately and publicly owned 
exempt properties with percentage of total assessed valuation for 
years 1907 and 1919 and some intervening years. 

Table X shows the amounts paid to tax exempt institutions in 
Westchester County by the several sub-divisions of the county and 
by the County itself in 1919 and 1920. 

91 


Historical Origin of Tax Exemption 


Cocq/akjttivc 7TAT6 Of InCRCASQ Of pROfeRTY P,Xec]fri012 
IK ToVK LiAR&e N- Y Statc CouNT/es 

O VCRAjbeRioD of /3 Ye/?7?3 


County 


Gkcatck 

WewYoRK 


Unix: 

County 


i^esTchesTCR 

County 



~TT 

Jbi-R/IZ 

V^es 

County' 



ColtntY 



r/ The Wok Id /?ad cone To 

AH CND /N /?20 ANDAll This 
YOATTeK o^75?o/eKTY 
ilxeco/Tio h Aajd CeASex?, 
TheM The CVCK ’/NCReAS/Ng 

ivj^DeN cfSvch txemfrioHs 

Yiouliobe iMl/STKATer> /* 

ftlTUR e. Jf/S T07<y booKS 


5TAKT;Ng/2?on NoyTHvk®, Tbz 7?ats at Which TWejerY Execrfr/oxs 

lMC]RC.A$eD IS shonn in Above X)/Ag*j?fln5. 


92 

























of Charitable Institutions 


TABLE I—IMPORTANT EXEMPTIONS IN NEW YORK STATE 

Greater New York heads the list of exempt property in New York 
State, with Erie, Albany and Westchester Counties following in that 
order in 1920. In 1907 Albany was second and Erie third. Since then 
Westchester County has increased 123%, Erie has increased 102%, Albany 
45% and Greater New York 93%. The tremendous increase in Westches¬ 
ter County has been caused by the acquisition by New York City of addi¬ 
tional watershed property, and also by the large number of private 
institutions that have moved from New York City to Westchester County. 
In Greater New York the percentage of publicly owned exempt is in¬ 
creasing, while the privately owned exempt is decreasing. In Westchester 
County the tendency is the reverse. 

1907 1920 Inc. in 13 Y’rs 


Greater New York. $1,184,047,833 $2,281,595,327 $1,097,547,494 

Albany. 55,832,363 80,805,018 24,972,655 

Erie . 51,215,796 102,599,885 51,384,089 

Westchester . 35,080,891 78,301,775 43,220,884 


TABLE II—THE CHARACTER OF PROPERTIES EXEMPT FROM 
TAXATION IN WESTCHESTER COUNTY IN THE YEARS 1907 
AND 1919, AS NEARLY AS THEY CAN BE SUBDIVIDED 


Subdivision 

Property United States. 

Property N. Y. State. 

County, Cities, Villages and Townships. 

Colleges . 

♦Public Schools. 

Private and Parochial Schools. 

Libraries . 

Agricultural Fair Grounds . 

Church owned and controlled. 

Fraternal, Benevolent, Charitable and Hospitals 

Pension Money . 

Cemeteries. 

Total ex'empt county. 

Public ownership was. 

Private ownership was. 

New York State Total. 


1907 

$800,000 

1,945,005 

10,619,763 


5,012,373 

3,605,800 

177,300 

55,500 

6.830.775 

9.830.775 
103,098 

1,614,300 


$35,080,891 

13,364,768 

21,716,123 

1,570,979,399 


1919 

$2,445,200 

3,131,500 

22,847,146 

624,000 

11,355,530 

11,126,500 

10,000 

50,000 

25,532,390 

25,532,390 

80,491 

1,822,300 


$67,049,122 

32,628,881 

34,420,241 

2,883,831,558 


♦ Colleges and Public Schools are combined in the one amount for the 
year 1907. 


93 


























Historical Origin of Tax Exemption 


TABLE III—VALUATION OF REAL PROPERTY EXEMPT FROM 
TAXATION FOR THE YEARS 1910 AND 1920 RESPEC¬ 
TIVELY, AS CERTIFIED TO NEW YORK STATE 
TAX DEPARTMENT BY THE ASSESSORS 
OF THE SEVERAL TAX DISTRICTS. 


Note.—The aggregate increase in the entire State was 68%, 
whereas in Westchester County the increase amounted to 79%. 


Counties 


1910 1920 


Albany . $62,078,240 

Allegany. 1,768,637 

Bronx (included in Greater New York) .. . 

Broome . 9,488,081 

Cattaraugus . 2,785,774 

Cayuga . 5,488,826 

Chautauqua . 6,472,489 

Chemung . 5,555,708 

Chenang . 1,801,799 

Clinton . 4,897,791 

Columbia . 2,632,459 

Cortland . 1,816,545 

Delaware . 1,158,355 

Dutchess . 11,245,187 

Erie . 54,755,017 

Essex . 827,359 

Franklin . 867,156 

Fulton . 1,681,727 

Genesee . 3,686,910 

Greene . 1,092,711 

Hamilton . 78,855 

Herkimer . 2,804,805 

Jefferson . 6,782,357 

Kings (included in Greater N. Y.). . 

Lewis . 656,792 

Livingston . 2,143,023 

Madison . 2,439,307 

Monroe . 21,367,963 

Montgomery . 3,122,515 

Nassau . 6,083,365 

New York, Greater. 1,359,337,339 

Niagara . 6,648,213 

Oneida . 11,878,950 

Onondaga. 27,153,443 

Ontario . 4,532,397 

Orange . 17,263,293 

Orleans. 5,311,668 

Oswego . 4,740,666 

Otsego . 2,173,405 

Putnam . 516 545 

Queens (included in Greater N. Y.). .... 

Rensselaer . 11,776,749 

Richmond (included in Greater N. Y.)... 

Rockland . 2,863,500 

St. Lawrence . 8,405,280 

Saratoga . 3,032,014 

Schenectady . 7 igi 444 

Schoharie .980^370 


$80,805,018 

3,825,496 

210,031,520 

14,598,974 

5,960,186 

7,386,488 

8,029,204 

10,465,299 

1,931,920 

5,899,541 

4,584,366 

2,030,913 

1,891,437 

14,426,735 

103,599,885 

2,162,799 

1,455,021 

3,216,079 

4,304,514 

1,587,939 

138,317 

5,601,513 

11,764,333 

425,312,620 

805,751 

2,688,935 

3,189,593 

39,430,195 

3,969,145 

7,854,665 

1,560,472,747 

16,038,116 

20,100,538 

38,090,563 

5,457,908 

23,942,739 

8,410,130 

8,339,618 

3,729,660 

770,075 

85,778,440 

16,965,148 

39,861,540 

3,912,110 

6,455,280 

9,111,309 

14,995,854 

1,409,213 


94 



















































of Charitable Institutions 


Counties 

1910 

1920 

Schuyler . 

. $298,422 

$330,095 

Seneca . 

. 2,351,260 

2,402,155 

Steuben . 

. 4,977,987 

6,700,182 

Sullivan . 

. 489,185 

863,410 

Tioga . 

. 1,732,275 

2,224,867 

Tompkins . 

. 13,840,204 

7,830,014 

Ulster . 

. 3,397,633 

5,714,666 

Warren . 

. 1,309,570 

2,519,935 

Washington . 

. 1,046,460 

4,732,004 

Wayne . 

. 4,313,383 

12,500,126 

Westchester (increase — 79%). 

. 43,644,846 

78,301,755 

Wyoming . 

. 1,531,037 

2,375,920 

Yates . 

. 793,985 

1,092,025 

(Increase — 68%). 

.$1,788,095,746 

$2,996,566,422 


In ten years the amount of exempt property in New York State has 
almost doubled. It will be more than doubled within the next two years 
or less, at the present rate of increase. 


TABLE IV—NEXT YEAR WILL SEE EXEMPT PROPERTY 
VALUES IN NEW YORK STATE OVER $3,000,000,000. IT IS 
NOW ONLY $3,433,578 SHORT OF THAT. THE AVER¬ 
AGE YEARLY INCREASE SINCE 1912 HAS BEEN 
ABOUT $117,000,000 IN THE STATE AND 
ABOUT $2,600,000 IN WESTCHESTER 
COUNTY. 


Per Cent. 

Total State Assessment Exempt Property of Total 


1906 . $7,933,057,917 $1,484,192,259 18.7 

1907 . 8,433,057,917 1,570,979,399 18.6 

1915 . 10,832,565,661 2,521,705,003 23.3 

1916 . 11,605,694,893 2,606,595,302 22.5 

1917 . 11,393,600,945 2,747,673,449 21.1 

1918 .. 12,006,966,764 2,809,793,022 23.4 

1919 . 12,625,190,013 2,883,831,558 22.7 

1920 . 14,595,726,491 2,996,566,422 20.5 


YEARLY INCREASE OF EXEMPT PROPERTY 


Westchester 

New York State County 

1913 over 1912. $207,299,960 $2,091,755 

1914 “ 1913. 106,271,495 1,956,448 

1915 “ 1914. 133,087,582 5,474,528 

1916 “ 1915. 96,451,488 2,428,942 

1917 “ 1916. 141,078,146 1,037,127 

1918 “ 1917. Minus 62,119,574 Minus 688,603 

1919 “ 1918. 74,038,536 3,323,808 

1920 “ 1919. 112,734,864 11,147,233 


95 



































Historical Origin of Tax Exemption 


TABLE V—TOTAL AMOUNT OF EXEMPT PROPERTY IN THE 
TOWNSHIPS AND CITIES OF WESTCHESTER COUNTY 
FOR 1912 AND 1920. THE INCREASE IN THE 
COUNTY AS A WHOLE WAS OVER 50%. 


Town 1912 1920 

Bedford . $1,231,110 $1,804,000 $572,890 

Cortlandt . 3,981,050 6,069,700 2,088,650 

Eastchester . 378,400 1,551,585 1,173,185 

Greenburgh. 5,630,790 6,905,490 1,274,700 

Harrison . 253,700 296,075 42,375 

Lewisboro . 85,450 86,050 600 

Mamaroneck . 595,050 887,550 292,500 

Mt. Pleasant . 4,039,500 4,191,275 151,775 

Mt. Vernon. 2,489,395 6,152,260 3,662,865 

New Castle. 223,400 432,600 209,200 

New Rochelle. 4,935,030 5,811,715 876,685 

North Castle. 124,650 211,790 87,140 

North Salem. 49,700 59,800 10,100 

Ossining. 2,818,348 2,867,370 49,022 

Pelham. 282,900 603,340 320,440 

Poundridge. 20,481 28,315 7,834 

Rye. 1,852,500 3,023,575 1,171,075 

Scarsdale . 71,000 559,400 488,400 

Somers . 423,600 715,650 292,050 

White Plains. 8,238,030 10,117,810 1,879,780 

Yonkers . 12,987,383 24,695,135 11,707,752 

Yorktown . 658,200 1,163,750 505,550 


$51,369,667 $78,234,235 $26,864,568 


TABLE VI—EXEMPTIONS IN WESTCHESTER COUNTY BY 
TOWNSHIPS AND CITIES IN 1920, CLASSIFIED 
ACCORDING TO OWNERSHIP. 


Town 

Bedford . 

Cortlandt 
Eastchester .. 
Greenburgh .. 
Harrison 
Lewisboro ... 
Mamaroneck . 
Mt. Pleasant . 
Mt. Vernon .. 
New Castle .. 
New Rochelle 
North Castle 
North Salem . 

Ossining. 

Pelham . 

Poundridge .. 

Rye . 

Scarsdale 

Somers. 

White Plains 

Yonkers . 

Yorktown ... 


Total 

Exempt 

$1,804,000 

6,069,700 

1,551,585 

6,905,490 

296,075 

86,050 

887,550 

4,191,275 

6,153,260 

432,600 

5,811,715 

211,790 

59,800 

2,867,370 

603,340 

28,315 

3,023,575 

559,400 

715,650 

10,117,810 

24,695,135 

1,163,750 


Privately 

Owned 

$466,400 

4.623.500 

423.150 
4,272,250 

121.300 
68,750 

402,050 

3.651.500 
3,006,160 

300,000 

1,271,595 

168,760 

40,000 

1,323,270 

181,600 

14,315 

1,685,575 

105,050 

649.150 
5,933,260 

12,123,410 

142.300 


Publicly 

Owned 

$1,337,600 

1,446,200 

1,128,435 

2,633,240 

174.775 

17,300 

485,500 

539.775 

3.147.100 

132,600 

4,540,120 

43,030 

18,800 

1.544.100 
421,740 

14,000 

1,338,000 

454,350 

66,500 

4,184,550 

12,571,725 

1,021,450 


Total 


$78,234,235 $40,973,345 $37,260,890 


96 






















































of Charitable Institutions 


TABLE VII—AMOUNT OF EXEMPT PROPERTY IN THE 
COUNTY BY TOWNSHIPS AND CITIES IN WESTCHESTER 
COUNTY IN 1907, DIVIDED AS TO PRIVATE AND PUBLIC 
OWNERSHIP. THE PERCENTAGES REFER TO THE 
TOTAL AMOUNT OF EXEMPTIONS. 



Private 

Per 

Public 

Per 

Town 

Owned 

Cent. 

Owned 

Cent. 

Bedford . 

. $234,410 

42.7 

$300,200 

57.3 

Cortlandt . 

. 2,667,400 

88 . 

361,600 

12 . 

Eastchester . 

. 33,650 

33.4 

64,000 

66.6 

Greenburgh . 

. 3,354,160 

69.2 

1,331,500 

30.8 

Harrison . 

. 95,500 

53.9 

81,800 

46.1 

Lewisboro . 

. 54,000 

88 . 

7,400 

12 . 

Mamaroneck. 

. 228,700 

61.1 

145,000 

38.9 

Mt. Pleasant. 

. 1,560,250 

72.8 

585,500 

27.2 

Mt. Vernon . 

. 1,159,450 

60. 

775,975 

40. 

New Castle . 

. 113,360 

79.3 

29,500 

20.7 

New Rochelle . 

. 694,200 

32. 

1,479,000 

68 . 

North Castle . 

. 145,750 

92.3 

12,205 

7.3 

North Salem . 

. 29,150 

81.5 

6,600 

18.5 

Ossining . 

. 888,931 

33.6 

1,763,200 

66.4 

Pelham. 

. 142,800 

64. 

80,000 

36. 

Poundridge. 

. 18,080 

88.2 

2,500 

11.8 

Rye . 

. 520,600 

84.1 

97,500 

15.9 

Scarsdale . 

. 31,000 

43.7 

40,000 

56.3 

Somers . 

. 19,900 

60.7 

12,900 

39.3 

White Plains . 

. 5,088,592 

74.8 

1,728,350 

25.2 

Yonkers . 

. 4,514,540 

52.1 

4,141,838 

47.9 

Yorktown . 

. 132,700 

29.5 

318,200 

70.5 

Total . 

.$21,716,123 

62. 

$13,364,768 

38. 


TABLE VIII—TOTAL EXEMPT PROPERTY BY TOWNSHIPS 
AND CITIES OF WESTCHESTER COUNTY IN 1919, DIVIDED 
INTO PUBLIC AND PRIVATE OWNERSHIP. PERCENT¬ 
AGES REFER TO THE TOTAL EXEMPTIONS. SEE 
TABLE FOR 1907 TO OBSERVE INCREASES. 



Private 

Per 

Public 

Per 

Town 

Owned 

Cent. 

Owned 

Cent. 

Bedford . 

. $477,600 

28.3 

$1,212,050 

71.7 

Cortlandt . 

. 4,016,300 

74.7 

1,360,200 

25.3 

Eastchester . 

. 229,725 

29.6 

545,546 

70.4 

Greenburgh . 

. 4,911,490 

73.2 

1,800,800 

26.8 

Harrison . 

. 118,400 

44.2 

149,775 

55.8 

Lewisboro . 

. 68,550 

84. 

13,000 

16. 

Mamaroneck. 

. 539,500 

64. 

303,050 

36. 

Mt. Pleasant . 

. 3,735,800 

88 . 

510,500 

12 . 

Mt. Vernon . 

. 2,044,960 

49.6 

2,077,300 

50.4 

New Castle . 

. 277,950 

87.3 

89,500 

12.7 

New Rochelle . 

. 1,286,045 

23.1 

4,272,720 

76.9 

North Castle . 

. 173,360 

85.2 

30,400 

14.8 

North Salem . 

. 41,000 

68.6 

18,800 

31.4 

Ossining . 

. 1.277,920 

45.8 

1,510,000 

54.2 

Pelham . 

. 169,050 

40.1 

251,955 

59.9 


97 











































Historical Origin of Tax Exemption 



Private 

Per 

Public 

Per 

Town 

Owned 

Cent. 

Owned 

Cent. 

Poundridge . 

. $12,511 

54.3 

$10,500 

45.7 

Rye . 

. 1,136,795 

47.8 

1,246,080 

52.2 

Scarsdale . 

. 58,650 

21.2 

218,305 

78.8 

Somers. 

. 516,100 

90.5 

54,050 

9.5 

White Plains . 

. 4,731,100 

58.8 

3,318,500 

41 2 

Yonkers . 

. 8,654,685 

41.1 

12,389,550 

5S.9 

Yorktown . 

. 214,500 

17.4 

1,022,250 

82.6 

Total. 

.$34,420,241 

1 m 

$32,628,881 

48.6 


TABLE IX—TOTALS OF PUBLICLY AND PRIVATELY OWNED 
PROPERTIES IN WESTCHESTER COUNTY EXEMPTED 
FROM TAXATION AND PERCENTAGE OF THE 
TOTAL EXEMPTION 


Total Private Per Cent. Public Per Cent. 

Year Exempt Owned of Total Owned of Total 

1907.$35,080,891 $21,716,123 61.9 $13,364,768 38.1 

1915 . 60,892,378 32,286,533 53. 28,605,845 47. 

1916 . 63,321,320 33,192,928 52.5 30,128,392 47.5 

1917 . 64,934,031 33,903,130 52.2 31,030,901 47.8 

1918 . 63,669,844 32,331,339 50.7 31,338,505 49.3 

1919 . 67,049,122 34,420,241 51.4 32,628,881 48.6 


AMOUNT AND PERCENTAGE OF ASSESSED VALUATION 

EXEMPT 
Total County 


Year Assessment Exempt Per Cent. 

1907. $257,826,966 $35,080,891 13.6 

1915 . 389,986,028 60,892,378 15.6 

1916 . 427,384,825 63,321,320 14.8 

1917 . 442,312,887 64,934,031 14.7 

1918 . 457,012,022 63,669,844 13.9 

1919 . 488,215,893 67,049,122 14.1 


TABLE X—WESTCHESTER COUNTY PAYMENTS TO PRIVATE 
TAX EXEMPT INSTITUTIONS FOR CARE OF 
CHILDREN IN 1918-19 

A considerable part of the exempt property in Westchester County is 
owned by private institutions that care for children making a stated charge 
per week for that service. The three institutions with property in West¬ 
chester County that received the largest sums for the care of Westchester 
County children, while enjoying exemption from taxation were for 1918 
and 1919 as follows: 


Town Catholic Missionary Leake 

1918 Protectory Sisters & Watts 

Bedford. $220 $365 

Cortlandt. 194 7,112 $547 

Eastchester. 3,897 _ 

Greenburgh . 417 4,435 _ 

Harrison . 195 158 _ 


98 






























of Charitable Institutions 


Town Catholic Missionary Leake 

1918 Protectory Sisters & Watts 

Lewisboro . $193 _ _ 

Mamaroneck . 2,178 $1,551 $351 

Mt. Pleasant. 1,083 1,607 547 

Mt. Vernon. 3,693 5,112 3,958 

New Castle. 3,693 _ _ 

New Rochelle . 4,388 3,763 365 

North Castle . 195 249 _ 

North Salem. . . 

Ossining . 2,761 102 

Pelham . . .... 

Poundridge . . .... 

Rye. 1,758 263 97 

Scarsdale ... .... _ 

Somers . .... .... 

White Plains . 228 2,534 585 

Yonkers. 7,148 19,356 2,791 

Yorktown . .... .... 

Westchester County. 15,647 1,018 115 


Total . $37,543 $54,175 $9,461 

1919 

Bedford. $195 $365 

Cortlandt .. 251 4,564 $714 

Eastchester. 123 2,524 _ 

Greenburgh . 571 3,954 170 

Harrison. 195 .... 34 

Lewisboro. 46 - 

Mamaroneck . 1,291 2,128 417 

Mt. Pleasant. 1,392 1,750 625 

Mt. Vernon . 2,200 4,742 4,374 

New Rochelle . 4,090 5,009 417 

North Castle . 184 182 

Ossining . 2,375 - 

Rye. 1,096 1,357 109 

White Plains . 397 2,546 980 

Yonkers. 6,219 17,214 4,165' 

Yorktown . 282 .... - 

Westchester County. 14,953 459 188 


Total. $33,456 $49,218 $12,209 


In 1918 the total paid to the three was $101,179 and in 1919 it was $94,884. 
This means an average in 1918 of $8,431 a month or $1,824 a week. For 
the two years the three institutions received the sums of $196,063 from the 
County and its subdivisions. The appropriation for 1920 for care of chil¬ 
dren in institutions was $197,000. For 1921 there was allowed $240,000 
for the care of children in institutions and in families. 


99 

































































/ 








« 







JON 


7 I9f« 



















































